On Monday, the price of gold continued to fall, reaching about $2,040 per ounce. This decrease is part of a larger downward movement that started last week. Investors are now looking forward to the US inflation data that is coming soon. They believe this data will be crucial in determining what the Federal Reserve does next with its monetary policy.
Last week, we observed a nearly 1% decrease in the price of gold. During this time, the US dollar grew stronger and the Treasury yields rose. These changes have made traders reconsider their expectations. They are now less hopeful about the US central bank making quick or significant cuts to interest rates.
At present, traders estimate there is a 60% likelihood that the Federal Reserve will cut interest rates in March. This is a decrease from last week when nearly 90% of traders thought a rate cut was likely.
Data from a recent jobs report indicates that the US economy added 216,000 jobs in December. This figure is significantly higher than the 170,000 jobs that analysts had predicted. Even with more stringent financial conditions, the job market seems to be robust.
Lastly, a report from a private survey points to a considerable slowdown in the US services sector last month. This indicates that this important area of the economy might be losing momentum.