On Tuesday, the gold price hovered around $2,020 an ounce. This stabilization came after the price had fallen for two consecutive days. The primary reasons for this trend are the solid economic reports emerging from the US and the straightforward guidance from the Federal Reserve. These elements have led to diminished expectations of a decrease in interest rates.
A recent report revealed that in January, the US services sector experienced its fastest growth in four months, with a rate of 53.4. This figure surpasses the anticipated rate of 52.
Additionally, preceding this report was another significant announcement. It highlighted that the US economy welcomed 353,000 new jobs in January, a number that exceeds the initially revised figure of 333,000 jobs in December. Furthermore, this figure significantly surpasses the forecast of 180,000 new jobs.
Jerome Powell, the Chairman of the Federal Reserve, shared insights on interest rates during a CBS interview over the weekend. He expressed that a reduction in rates in March seems improbable. His statement echoed his previous remarks following the decision of the Federal Open Market Committee (FOMC) last week.
Powell also indicated that the pace at which the Federal Reserve might lower rates could be slower than market expectations.
Currently, market sentiment suggests a 15% probability of a rate cut by the Federal Reserve in March. Market participants also anticipate a total reduction of 115 basis points in interest rates throughout this year. This expectation is a downward revision from the earlier projection of a 150-basis point cut at the beginning of January.