Gold futures prices fall below $2,050 as a stronger dollar and rising bond yields weigh on the market.
InfoQuest – Gold futures prices fell below the 2,050 level, influenced by the rise in the value of the dollar. US government bond yields rebound.
At 7:47 PM Thailand time, gold contracts will be delivered on the COMEX (commodity exchange) market in February. Minus US$3.40, or 0.17%, to US$2,046.60 per ounce.
A stronger dollar reduces the attractiveness of gold. By making gold contracts more expensive for holders of other currencies at the same time, a rebound in US government bond yields will increase the opportunity cost of holding gold. This is because gold is an asset that does not return in the form of interest.
Investors will be watching non-farm payrolls numbers tonight. While analysts expect this, non-farm employment rose by only 163 thousand jobs in December. After adding 199,000 jobs in November, the unemployment rate is expected to rise to 3.8% in December from 3.7% in November.
In addition, gold prices were affected by the statement of Thomas Barkin, President of the Federal Reserve Bank of Richmond, and the release of the minutes of the Federal Open Market Committee (FOMC) monetary policy meeting on December 12. -13.It makes investors lose weight when they predict that the Fed will start cutting interest rates as early as March 2024.
Mr. Barkin has indicated that he will continue to raise interest rates. Although inflation has slowed, he said there is still a risk that the Fed's mission to stop inflation may not be over.
“Long-term interest rates have fallen recently. It will stimulate demand in the real estate sector, which is sensitive to interest rates. Strong demand will not solve the problem of over-target inflation. This makes further interest rate increases an option for the Fed,” Barkin said.
Minutes from the Federal Open Market Committee's December 12-13 meeting indicate there is a possibility that the Fed will cut interest rates in 2024, but no clear time frame for such rate cuts has been revealed.
At the FOMC meeting in December, the meeting unanimously decided to keep the interest rate at 5.25-5.50%, and the Fed managers expected this. There will be an overall interest rate cut of 0.75% by the end of 2024.
However, the minutes of the meeting indicate that there is still a great deal of uncertainty about whether or not the Fed will cut interest rates. Will there really be a cut in interest rates?
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