On Monday, the price of gold increased to more than $2,020 for each ounce. This rise made up for some of the losses from the previous week. The reason for this increase was the growing conflict in the Middle East. This situation made investors want to buy gold, which they see as a safe choice during uncertain times.
Experts mentioned two specific events that caused worry. First, Houthi rebels attacked a Transfigura-operated oil tanker near Yemen’s coast. Second, a drone struck US forces in northeastern Jordan. This attack resulted in the death of three US soldiers.
At the same time, investors were being very careful. They were waiting to see what the US Federal Reserve would do about its money policy. This decision was going to be announced later in the week.
Many people thought that the US central bank would not change interest rates. However, everyone was eager to hear what Jerome Powell, the head of the Fed, would say after the meeting. They hoped his words would give them hints about when the bank might start to make borrowing money cheaper.
Meanwhile, the US shared some economic data that was better than what people were expecting. Also, some Fed officials made comments that suggested they didn’t want to lower interest rates too soon. These two things made people less sure that the Fed would reduce rates in March.
The markets reflected this uncertainty. The chances of the Fed lowering rates in March were seen as 48%. This was a big drop from the 86% chance people believed in at the end of December. These percentages came from a tool called FedWatch, which is run by CME.