The price of gold remained stable on Wednesday, hovering around $2,030 per ounce. This stability comes after the metal lost some value earlier in the week. Investors are now waiting for upcoming US inflation data. They believe this data will give them insights into what actions the Federal Reserve might take next.
In recent times, gold has faced some downward pressure. This situation occurred because the value of the US dollar and Treasury yields started to rise. Consequently, traders have become less optimistic about the Federal Reserve cutting interest rates soon and by a large amount.
At this moment, the probability of the Federal Reserve lowering interest rates in March is 64%. This figure is significantly lower compared to what it was a week ago, when the chance was nearly 90%.
Many analysts now believe that May could be the beginning of the Federal Reserve reducing its rates. They think this because the job market in the US is still robust and inflation continues to be higher than the central bank’s target of 2%.
In other economic news, there was an unexpected report on Tuesday. It showed that the US trade deficit decreased in November. This reduction happened because the US imported fewer consumer goods. The fall in imports indicates that there is a decrease in demand within the US economy.