Gold prices rose in early trading on Wednesday, after traders read the summaries issued yesterday were based on expectations for today’s gold price, indicating that the markets are interpreting recent Federal Reserve minutes as including more cuts.
Gold prices extended their gains for a second day in a row, as investors awaited key inflation data in the United States, looking for near-term signs that the Federal Reserve (U.S. central bank ) interest rates at their December meeting.
Gold today
Gold in immediate trade rose 0.3%, or $8, to $2,641 an ounce by 5:10am GMT.
US gold futures contracts, for delivery next December, rose 8%, or the equivalent of $20 per ounce, to reach $2640.1 per ounce.
At the close of trading yesterday, gold prices rose after touching their lowest level in more than a week due to a decline in demand for safe havens due to optimism about the possibility of a ceasefire between Israel and the Lebanese Hezbollah group.
Spot gold ended 0.3% higher after hitting its lowest since November 18 earlier in the session, while US gold futures rose 0.6%.
Federal summaries
Meeting participants believe that a rate cut and a change in monetary policy stance would help maintain the strength of the economy and the labor market while continuing to facilitate further progress on inflation. .
Participants expected that if the data is as expected, with inflation continuing to move steadily low to 2% and the economy still close to peak employment, it would seem appropriate to move gradually towards a more neutral monetary policy over time.
Members of the US Federal Reserve pointed out that monetary policy decisions do not proceed according to a predetermined path and that they are responsible for the development of the economy and the impact on economic expectations and the balance of risks. They confirmed that it would be important for the Committee to clarify this issue while changing its stance on monetary policy.
In considering the stance of monetary policy in response to possible changes in the balance of risks, some Fed members indicated that the committee could temporarily freeze interest rates and keep them at a limited level if inflation is still high.
US Fed members also noted that uncertainty about the level of the neutral interest rate has moderated the degree of tightening of monetary policy and, in their view, made it appropriate to cut rates more gradually. .
What is the market looking for?
Traders are currently watching the ceasefire between Israel and the Lebanese Hezbollah group come into force, as gold is considered a safe investment in times of economic and geopolitical uncertainty. such as trade wars and other conflicts.
Traders will keep a close eye on core PCE data, jobless claims and the first revision of GDP, which is expected to be released later today.
These reports are expected to play an important role in shaping expectations of whether the Federal Reserve will go ahead with interest rate cuts in December, as lowering interest rates lowers the opportunity cost for to keep barren gold.
According to the CME Group’s Fed Watch tool, markets currently expect 63% of US interest rates to be cut by 25 basis points in December.
Trump’s explanations
The yellow metal’s appeal as a safe haven has been boosted after Trump vowed to impose heavy tariffs on Canada, Mexico and China, the US’s three biggest trading partners, which could ignite trade wars .
Customs tariffs raise a number of uncertainties, including the risk of rising inflation, which could prevent interest rates from falling and negatively impact gold prices.
Although Scott Besant, US President Donald Trump’s nominee for the US Treasury portfolio, believes that trade tariffs are a foreign policy tool, he expressed his support for the dollar to remain strong in addition to tariff policy habits.
2024-11-27 06:21:00
#Gold #prospecting #markets #read #Fed #minutes #Business #Erm
**Given the divergence of opinion on the likelihood of future interest rate cuts, what specific economic indicators will investors be most closely watching to gauge the Federal Reserve’s next move and its impact on gold?**
## World Today News: Gold Market Update
**Radio host:** Welcome back to World Today News! Today, we’re diving into the volatile world of gold markets with two esteemed guests:
* **Dr. Emily Carter**, Chief Economist at Global Investment Strategies
* **Mark Reynolds**, Senior Commodities Analyst at Bridgeforth Capital
**Radio host:** Thank you both for joining us. Let’s start with the big news: gold prices have been on a rollercoaster ride lately. What are the key factors driving this recent volatility?
**Dr. Carter:** It’s a complex picture, but we can point to a few major players. Firstly, the recent escalation of tensions between Israel and Hezbollah has created significant geopolitical uncertainty, pushing investors towards safe haven assets like gold.
**Radio host:** Interesting. Mr. Reynolds, do you agree?
**Mr. Reynolds:** Absolutely. Gold traditionally acts as a safe haven in times of turmoil. However, the recent strength in the dollar is counteracting some of that demand.
**Radio host:** Let’s delve deeper into the connection between the Federal Reserve and gold. The article mentions that the market seems to be interpreting the latest Fed minutes as potentially indicating further interest rate cuts.
**Dr. Carter:**
gYes, the market is keenly awaiting further signals from the Fed. A dovish stance, suggesting more rate cuts, would likely boost gold prices as lower interest rates reduce the opportunity cost of holding non-yielding assets.
**Radio host:** Mr. Reynolds, what’s your take on this? Are we headed for a December rate cut?
**Mr. Reynolds:** I think it’s a close call. The upcoming inflation data, particularly the core PCE, will be crucial in swaying the Fed’s decision. If inflation softens, a rate cut is more likely.
**Radio host:** So, we are essentially waiting for economic data to tell us where gold prices might be headed?
**Dr. Carter:** Exactly. This week’s releases on jobless claims and the first GDP revision will also be closely watched by the market.
**Radio host:** Interesting. Now, let’s shift gears and discuss the potential impact of trade tensions on gold prices.
The article mentions President Trump’s recent tariff threats. Could this create further volatility?
**Mr. Reynolds:**
**Certainly. Trade wars raise concerns about inflation and global economic slowdown. This uncertainty often supports gold prices.**
**Radio host:** Dr. Carter, do you agree with this assessment?
**Dr. Carter:** While tariffs can spark short-term rallies in gold, prolonged trade conflicts can ultimately damage economic growth, which could negatively impact gold demand in the long run.
**Radio host:** This is a fascinating discussion. Thank you both for providing such insightful perspectives on the gold market. It’s clear that the interplay of geopolitical tensions, monetary policy decisions, and global economic conditions will continue to shape gold’s trajectory in the coming weeks and months.
