Gold futures prices continue to rebound, most recently surpassing $2,040, the dollar is weak, and bond yields are falling, supporting the market.

InfoQuest – Gold futures prices continue to rebound. Recently, it crossed the 2040 level, with positive factors coming from a weaker dollar. And lower US government bond yields.

At 10:36 PM Thailand time, gold contracts will be delivered on the COMEX (commodity exchange) market in April. It added $17.10, or 0.84%, to $2,041.20 per ounce.

A weak dollar increases the attractiveness of gold. This makes gold contracts cheaper for holders of other currencies. As for the decline in US government bond yields, it will help reduce the opportunity cost of owning gold. This is because gold is an asset that does not return in the form of interest.

Investors will be watching the minutes of the Federal Open Market Committee (FOMC) meeting on January 30-31, as well as comments from Federal Reserve officials, for signs indicating the direction of US interest rates.

The Federal Open Market Committee unanimously decided to keep short-term interest rates at 5.25-5.50% at the meeting. This is the highest level in more than 22 years.

The announcement of maintaining interest rates this time is as expected by the market. This is the fourth consecutive freeze on interest rates after the Fed raised interest rates 11 times since the beginning of the interest rate hike cycle in March 2022. As a result, the Fed raised interest rates Interest rate of 5.25%. However, the Fed indicated that it has no plans to cut interest rates. This is because inflation is still above the Fed's target.

Meanwhile, the market is watching Federal Reserve Chairman Jerome Powell, who is scheduled to deliver his semi-annual statement on US monetary policy and economic conditions to Congress in March.

Powell is scheduled to deliver a statement before the House Financial Services Committee on March 6, before addressing the Senate Banking Committee on March 7.

Investors are watching Mr. Powell's statement. This will be done before the Fed's monetary policy meeting on March 19-20 to find signals indicating the direction of the Fed's interest rate. After the US released the Consumer Price Index and Producer Price Index higher than expected last week.

The release of higher-than-expected inflation numbers led investors to postpone their expectations for the first Fed rate cut of the year to June. This was previously expected to happen as early as March. But it was postponed to May. Before the latest, it was expected that the interest rate would be cut in June.

In addition, higher-than-expected inflation numbers have led investors to begin lowering their expectations for interest rate cuts in June. As a result, the Fed is expected to cut interest rates by 0.25% only 3 times this year, compared to the original expectation that the Fed would cut rates more than 4 times.

Click to read original news from InfoQuest.