On Monday, the price of gold went up more, but it’s a bit below the highest it’s ever been, which is $2,450. This happened during the Asian trading session. People are thinking that big central banks, like the Federal Reserve, might make borrowing money easier in 2024. Right now, gold is trading at $2,433, which is 0.80% higher.
People’s feelings about the market are mixed, but leaning towards positive. The S&P 500 and NASDAQ 100, two big stock market indexes, went up, while the Dow Jones, another big index, stayed almost the same. Last week, the news about how much prices are going up for things people buy (inflation) in the United States wasn’t as bad as expected. This made more people think that the Federal Reserve might lower borrowing costs, starting as early as September. This information comes from the CME FedWatch Tool, which shows what investors think the Federal Reserve might do.
Chances of the Fed lowering rates by 0.25% in September are at 76%. Investors think there might be two cuts by the end of the year, which would make the interest rate between 4.75% and 5.00%.
This week, many people from the Federal Reserve will be talking about the US economy before we get the latest notes from the Fed meeting on Wednesday. On Thursday, we’ll see a report about how many people are asking for unemployment benefits. It’s expected to show that the job market is not as strong as before, along with another report called the Chicago Fed National Activity Index.
Daily Digest Market Movers: Gold Price Continues Upward Trend Despite Fed’s Hawkish Comments
Gold price goes up even though US Treasury bond yields are higher and the US Dollar is weaker. The US 10-year Treasury note now gives 4.437% interest, which is 1.5 basis points higher than before. The DXY, which shows how strong the US Dollar is compared to other currencies, is up by 0.06% to 104.55.
Last week, the data about how much prices are going up for things people buy (inflation) showed that it’s not going up as fast as before. This made traders think that maybe the US central bank would start making it easier to borrow money again. But they need to be careful because some people from the Federal Reserve said that just because of one report showing inflation is going down, doesn’t mean it will stay that way.
Some Federal Reserve officials talked earlier. Raphael Bostic, from the Atlanta Federal Reserve, said that the rules about borrowing money are tight and it will take time before they’re sure inflation will go up to 2%. Michel Barr, who is the Vice-Chair, said something similar, saying that they need to keep the rules about borrowing money strict to keep things stable.
More recently, Philip Jefferson, another Vice-Chair, said it’s hard to know when inflation will start going down again, but he thinks the rules about borrowing money are too tight.
Now, Loretta Mester, from the Cleveland Federal Reserve, said that the latest report about inflation is okay, and the risks of keeping the rules about borrowing money too tight are lower now. But she also said that there’s still a risk that inflation might go up more.
Technical Analysis: Gold Price Surges to $2,450 with Bulls Eyeing $2,500
Gold prices are on track to reach even higher levels after reaching a new highest point of $2,450. This could mean more gains are coming. Buyers are still strong, as shown by the Relative Strength Index (RSI), although it’s not in the ‘too high’ zone yet.
If gold breaks past the highest point ever, the next goals are $2,475 and then $2,500.
On the other hand, if gold falls below $2,400, it might go down more, reaching $2,332 first and then $2,303. After that, it could touch the 50-day Simple Moving Average (SMA) at $2,284.
