Islam Saeed wrote Wednesday, November 8, 2023 01:13 PM It decreased gold prices For the third session in a row today, Wednesday, in light of the rise in US dollar levels, while markets await Federal Reserve Chairman Jerome Powell’s speech today to search for more clarity about the future of interest rates.
At the time of writing the Gold Billion technical report, spot gold prices are trading at the level of $1,967 per ounce after a limited decline of 0.1%, recording a decline for the third day in a row. Yesterday, gold recorded its lowest level in more than two weeks at $1,956 per ounce.
The US dollar has continued to recover since the beginning of the week, increasing the negative pressure on currencies and commodities in the financial markets. The dollar index rose during today’s session by 0.3%, recording an increase for the third day in a row, and since the beginning of the week, it has recorded an increase of 0.7%.
The rise of the dollar began with the statements of members of the Federal Reserve, which indicated that it was too early for the bank to announce its victory over inflation, and therefore it was not yet time to announce the end of monetary policy tightening operations, causing this to rise in the levels of the US dollar.
Today, the markets are awaiting the speech of Federal Reserve Chairman Jerome Powell, which is expected to show more clarification regarding monetary policy and the continuation of monetary tightening, after the Fed’s meeting last week, which showed caution in the tone of the bank’s speech, which the markets considered a sign of the end of interest rate hikes.
But before Powell, several Fed officials, including Michael Bowman, Minneapolis Bank President Neel Kashkari and Bank of Chicago President Austin Goolsbee, indicated that inflation is still very high, and that interest rates are likely to rise further in the coming months.
Even if the Fed pauses, it is only expected to start cutting interest rates by mid-2024, limiting any significant near-term gains in gold. The central bank indicated that US interest rates will remain higher for a longer period, and are likely to remain above 5% until the end of 2024.
Futures indicate a roughly 15% chance of interest rates rising again by January, but expect a 20% chance that cuts could come as early as March.
On the other hand, we find that gold has lost support from the decline in demand for safe havens in the markets in light of the markets’ conviction that the war in the Gaza Strip will not witness an expansion in its area or the entry of new parties, which prompted them to abandon safe haven investments, especially gold, in favor of risky investments. Like stocks.
2023-11-08 11:13:00
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