The prices of gold They were heading on Wednesday to close the first month of 2024 in negative territory, which broke a three-month winning streakas investors lowered their expectations for interest rate cuts this year ahead of the U.S. central bank’s outlook on monetary policy later in the day.
Spot gold was trading flat at $2,036.88 an ounce at 1040 GMT, while U.S. gold futures rose 0.3% to $2,036.70.
Gold is down 1.3% so far this month after hitting an all-time high in December. The odds that the Federal Reserve will cut rates in March have fallen to 46%, down from 90% a month ago, according to CME’s FedWatch tool.
“Fed officials will keep all options on the table and will make the decision at the March meeting based on incoming macroeconomic data,” said Giovanni Staunovo, an analyst at UBS. “So I would expect modest price moves in gold, with the focus shifting to employment and inflation data in the coming weeks,” he added.
This Wednesday, January 31, the two-day meeting of the Federal Open Market Committee (FOMC) concludes. While the Fed is likely to keep interest rates unchanged, Chairman Jerome Powell’s press conference at 19:30 GMT will be the subject of attention for information on how quickly the Fed will cut interest rates this year.
Putting pressure on gold, the dollar index was headed for its best month since September and benchmark U.S. Treasuries yielded 3.9920%, a more than two-week low.
Among other precious metals, spot silver fell 0.5% to $23.0442 an ounce; while platinum fell 0.2% to US$919.37 and palladium rose 0.1% to US$976.80. All 3 were headed for a monthly decline.
Dollar falls against the euro and the yen
Traders will focus on whether Fed Chair Jerome Powell rejects the likelihood of a rate cut in March. The dollar index fell 0.42% against a basket of 6 major currencies to 102.97 units, and in the month it accumulates an increase of 1.6%.
He dollar fell 0.71% to 146.61 yen. The Japanese currency has weakened due to the large difference between US and Japanese interest rates.
The yen has lost almost 4% against the dollar this month and is headed for its biggest monthly drop since February last year, as tepid wage data and cooling inflation leave room for the Bank of Japan to take its time in raising rates.
The euro rose 0.28% to US$1.08740; Meanwhile, the pound sterling gained 0.31%, to US$1.27420, before the Bank of England’s monetary policy announcement last Thursday.
With information from Reuters
Source: Larepublica
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