© Reuters.
Investing.com – Updated at 22:02 KSA
Gold recorded in instant transactions the level of $1,995 per ounce, rising by 0.76%.
The rise comes after the Fed’s decision to stabilize the interest rate, and the indication of all members of the Open Market Committee to reduce interest rates in 2024.
Gold has an inverse relationship with interest, because gold is a store of value and has no return, while raising interest on the dollar makes the dollar an attractive asset for investors.
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Updated at 16:42 Saudi time
Gold prices significantly strengthened their gains immediately after the release of the US Producer Price Index data, as the index recorded a slowdown in this reading, which gives the Federal Reserve an opportunity to cut interest rates early.
Gold futures are now up 0.41% to $2,001 an ounce.
Meanwhile, spot gold contracts rose by 0.33% to $1,986 per ounce.
To read the data released recently:
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Gold prices move in a narrow range in trading today, Wednesday, with investors reluctant to make big bets ahead of monetary policy expectations later in the day.
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Interest decision
The Fed’s policy committee, which sets interest rates, will issue its policy statement and interest rate decision at 22:00 Saudi time, followed by its Chairman Jerome Powell’s press conference at 22:30 Saudi time.
Traders widely expect the Fed to leave interest rates unchanged at 5.25%-5.50% this week and expect a roughly 75% chance of a rate cut in May, according to .
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Investors will look forward to Powell’s comments that could shed more light on the Fed’s monetary policy outlook amid expectations of interest rate cuts in the first half of 2024.
“In November, there was a big shift in market expectations regarding Fed rate expectations,” said Ilya Spivak, head of global macro at Tastylive. “We saw the dollar and yields fall as a result, which helped gold.”
“However, I think the Fed does not want to go too far in endorsing a pessimistic view because inflation expectations may then change,” he added.
The U.S. Consumer Price Index rose 0.1% last month after remaining unchanged in October, the U.S. Department of Labor’s Bureau of Labor Statistics said on Tuesday. In the 12 months through November, the CPI rose 3.1% after rising 3.2% in October.
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Gold, which pays no interest, tends to benefit when interest rates fall because this reduces the opportunity cost of holding bullion.
Market participants are also awaiting the monetary policy meetings of the European Central Bank and the Bank of England on Thursday.
The SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.33% to 875.65 tons on Tuesday.
Read also:
Gold at settlement yesterday
Prices erased their gains when settling trading yesterday, Tuesday, with the evaluation of consumer price inflation data in the United States, coinciding with the start of the Federal Reserve’s monetary policy meeting.
Upon settlement, gold futures prices for February delivery settled at $1,993.2 per ounce, after rising during trading to $2,012.5.
Gold and dollar now
Gold futures rise 0.09% to $1,995 an ounce.
While it rose by 0.03% to $1,980 per ounce.
On the other hand, it also rose by 0.08% to 103.55 points.
other metals
Spot transactions fell 0.1 percent to $22.73 per ounce, while platinum fell 0.1 percent to $928.27 and fell 0.3 percent to $976.42.
2023-12-13 19:12:00
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