On Wednesday, gold rose more than 1% as a result of the dollar and Treasury yields falling following the U.S. Federal Reserve's announcement that they intend to cut interest rates by 0.75% by the end of 2024. As of 15:23 p.m. EDT (19:23 GMT), one ounce of spot gold was worth $2,183.02, an increase of 1.2%. With a final settlement of $2,161, U.S. gold futures were up 0.1%.
Interest rates were left unchanged by the Federal Reserve on Wednesday, although officials have dropped hints that they still plan to cut them by 0.75% by the end of 2024.
Gold is set to benefit from two pieces of positive news today, according to Tai Wong, an independent metals trader based in New York. First, the Federal Reserve is still expecting three rate cuts this year. Second, the higher interest rate estimates going future show that the central bank is concerned that inflation will be tougher to control.
Wong elaborated that following the revised dot plot's maintenance of three 25 bps rate cuts this year, markets are slightly upbeat. Rate reduction this year are still widely expected, according to Fed head Jerome Powell, who added that the timing will depend on the facts.
when a conventional inflation hedge, gold is becoming more attractive when interest rates fall, leading investors to seek out non-yielding bullion. Despite hotter-than-expected macroeconomic data for February indicating continued persistent inflation, reducing rate-cut optimism, gold prices sank roughly 1% last week.
Following the Fed's rate decision, the market now expects a rate cut in June with a 73% probability, up from 65% before the decision.
Gold became more affordable for buyers abroad as a result of a weaker currency and falling ten-year Treasury yields following the Fed's decision. "Gold is poised to try for new all-time highs with the Fed risk out of the way," said Wong.
Support comes from central bank purchases, ongoing geopolitical concerns, and persistent demand for safe haven assets. Gold has been in demand in China from consumers and other types of investors, according to commodities strategist David Wilson of BNP Paribas.
At $25.56, silver strengthened by 2.6%. Platinum increased by 1.7% to $909.35, while palladium increased by 3.1% to $1,022.50.
stay turned for development