PT Solid Gold Berjangka | Gold Prices Firm on Fed Rate-Cut Prospects

01:40 27 December in Commodity, Gold, PT SGB, SOLID GOLD BERJANGKA | SOLID GROUP


Solid Gold Berjangka | The provided information outlines the factors contributing to the rise in gold prices:

  1. Weaker U.S. Dollar: Gold prices rose due to a weakened U.S. dollar. When the U.S. dollar weakens, gold, which is priced in dollars, becomes more affordable for investors using other currencies, leading to an increase in demand and subsequently higher prices.
  2. Lower Treasury Yields: The decrease in Treasury yields also supported the rise in gold prices. Gold, being a non-yielding asset, becomes more attractive when interest rates are lower. Lower yields on Treasury bonds reduce the opportunity cost of holding gold, making it a more appealing investment.
  3. Expectations of Federal Reserve Interest Rate Cut: The anticipation that the Federal Reserve will lower interest rates in the upcoming year played a significant role. Lower interest rates make non-interest-bearing assets like gold more attractive. Traders are pricing in an 89% chance of a rate cut by the U.S. central bank in March, according to the CME FedWatch tool.
  4. Geopolitical Tensions: Continuing geopolitical tensions were mentioned as a factor supporting gold prices. Gold is often considered a safe-haven investment during times of economic and geopolitical uncertainty, as investors seek assets perceived as more stable.
  5. Inflation and Economic Data: The mention of U.S. prices falling in November, slowing inflation, and boosting expectations of a Fed interest rate cut also contributed to the positive sentiment for gold. Lower inflation and the prospect of interest rate cuts can enhance the appeal of gold.

It’s important to note that the information is based on the given source, and market conditions can change rapidly due to various factors. Additionally, the mentioned analyst predicts a possibility of gold staying above $2,000 in 2024, highlighting the potential for a longer-term positive trend in gold prices.