On Friday, the price of gold remained over $2,050 per ounce. This week, it looks set to achieve an increase of nearly 2%. This rise comes as both the value of the US dollar and the yields on Treasury bonds have gone down. The reason for this decrease is the strong belief among investors that the US will likely reduce interest rates this year.
Despite these expectations, Jerome Powell, the Chair of the Federal Reserve, made it clear that cutting rates in March is not the likely plan. He emphasized that the Federal Reserve plans to keep interest rates as they are. They will do this until they are sure that inflation is steadily heading towards the 2% target they aim for.
Even after Powell’s statement, the belief that the Federal Reserve will lower rates in March is still present. However, this belief has decreased a lot. A month ago, the chance of a rate cut in March was seen as over 70%. Now, it’s seen as only 38%.
Experts in the financial market are placing their bets on the Federal Reserve. They predict that the bank will start to lower interest rates around the middle of 2024. They also think that there will be a total of three reductions in the rates throughout the year.
Now, investors are waiting for the US jobs report for this month. This report is eagerly awaited. Investors believe it will give them more information. Specifically, it will help them understand better how interest rates might change in the future.