On Monday, the price of gold remained stable at around $2,030 per ounce. Investors chose not to make large investments. They are waiting for important decisions on monetary policy from Japan and Europe this week. Additionally, they are looking out for crucial economic data from the US. There is a particular focus on Japan. Investors are curious about any signs that might suggest an end to the country’s negative interest rates. In Europe, officials are likely to strongly oppose any predictions of interest rate reductions this year.
In the United States, the government will release two important sets of data this week. These are the Gross Domestic Product (GDP) figures for the fourth quarter and the Personal Consumption Expenditures (PCE) inflation numbers. The Federal Reserve prefers the PCE numbers. These releases come just before the Federal Reserve’s policy meeting next week.
Last week, gold’s value dropped by about 1%. This decrease happened because the US dollar and Treasury yields went up. The rise was due to stronger-than-expected economic data from the US and clear hints from Federal Reserve officials. These hints suggested a tough stance on monetary policy. As a result, people are now less expectant of a decrease in interest rates in March.
According to the CME’s FedWatch Tool, the likelihood of the Federal Reserve lowering interest rates in March is now seen as 47%. This percentage has fallen a lot. Just a week ago, it was 81%.