The post Gold corrects but sets to end 2023 with 13.5% gains on firm Fed’s rate cut bets appeared on BitcoinEthereumNews.com.

Gold price falls back $2,065 as the impact of deep Fed rate cut hopes start fading away. The Fed is expected to start cutting interest rates from March 2024. Next economic triggers for the Gold price will be US Employment and Manufacturing PMI data. Gold price (XAU/USD) has extended its correction but a consolidation is likely ahead due to thin trading activity. Broadly, the precious metal may continue to remain in the positive trajectory as bets in favour of early rate cuts by the Federal Reserve (Fed) are  firming due to easing labour market conditions and a clear downtrend in the underlying inflation. This lowers the opportunity cost of holding the yellow metal and weakens the US Dollar, in which it is priced.  The Gold price is set to end 2023 with stellar gains of more than 13.50%. Deepening expectations for the Fed to start reducing interest rates from March 2024 will also keep appeal for the Gold price upbeat in 2024. Further action in the Gold price will be guided by the United States Nonfarm Employment and ISM Manufacturing PMI for November. Daily Digest Market Movers: Gold price drops while US Dollar, yields recover Gold price falls further to near $2,063.00 as the US Dollar and Treasury yields have recovered further. The 10-year US Treasury yields have rebounded to near 3.90% and the US Dollar Index (DXY) has climbed to near 101.35. The broader appeal for non-yielding assets is bullish as Fed’s stance of higher for longer interest rates has lost its essence and investors are pricing in early rate cuts in 2024. As per the CME Fedwatch tool, there is a 73% chance that the Fed will reduce interest rates by 25 basis points (bps) to 5.00-5.25%. The probability that the Fed will continue reducing borrowing rates in May too is 72%. In addition, a clear declining…

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Filed under: News - @ December 29, 2023 9:24 pm