On Thursday, the price of gold increased and went over $2,040 for each ounce. This rise pushed gold’s price close to its peak level, which we haven’t seen in more than two weeks. The main reason for this increase is that many investors believe the US Federal Reserve will lower interest rates significantly this year.
Jerome Powell, who leads the Federal Reserve, has talked about this situation. He said that it might be a good decision to reduce interest rates sometime within the year. However, he also mentioned that he doesn’t expect these cuts to start in March.
The general expectation among investors is now changing. They think the Federal Reserve will reduce interest rates by a total of more than 140 basis points during this year. This is a higher figure compared to the earlier predictions, which were about 130 basis points.
Apart from these expectations, other factors also pushed the price of gold up. One major factor is the significant drop in the yields of US Treasury bonds. Another factor is the financial problems faced by a local bank, the New York Community Bancorp. These problems made many investors look for safer places to put their money.
With all these events, investors are now waiting for more information. They are keenly looking forward to the release of the weekly jobless claims and the ISM PMI reports. Both of these reports are set to come out on Thursday. Investors are also very much interested in the monthly jobs report, which is scheduled for release on Friday.