Gold buying strategy according to Fed news
Updated
The Fed left interest rates unchanged on December 13th. Up to 17 of the Fed's 19 board members expect interest rates to fall in 2024, with the median expected interest rate in 2024 expected to be 75 basis points below current levels. This means there will be three rate cuts, assuming each rate cut is 25 basis points.
According to the dotplot chart, FOMC members expect four more rate cuts (equivalent to 100 basis points) in 2025 and three more in 2026, bringing rates back to the 2% range. -2.25%. “The Fed has acknowledged slowing inflation, which has raised expectations for rate cuts, but has also led to sharp declines in bond yields and the U.S. dollar, all of which are supportive factors for gold prices.” David Meagher said. High Ridge Futures. “We believe the upward trend in gold prices will continue.”
The U.S. dollar index fell 0.6% following the Fed's comments, making gold cheaper for holders of foreign currencies. The 10-year Treasury yield is at its lowest level since August 2023, after the Federal Reserve kept interest rates on hold for the third time and prepared for three cuts in 2024. This return he dropped to 4,016%. Although it temporarily exceeded 5% this year,
Traders currently expect a 60% chance that the Fed will cut interest rates in March 2024, according to CME Group. As interest rates fall, precious metals that don't provide returns to their holders become more attractive.
According to the dotplot chart, FOMC members expect four more rate cuts (equivalent to 100 basis points) in 2025 and three more in 2026, bringing rates back to the 2% range. -2.25%. “The Fed has acknowledged slowing inflation, which has raised expectations for rate cuts, but has also led to sharp declines in bond yields and the U.S. dollar, all of which are supportive factors for gold prices.” David Meagher said. High Ridge Futures. “We believe the upward trend in gold prices will continue.”
The U.S. dollar index fell 0.6% following the Fed's comments, making gold cheaper for holders of foreign currencies. The 10-year Treasury yield is at its lowest level since August 2023, after the Federal Reserve kept interest rates on hold for the third time and prepared for three cuts in 2024. This return he dropped to 4,016%. Although it temporarily exceeded 5% this year,
Traders currently expect a 60% chance that the Fed will cut interest rates in March 2024, according to CME Group. As interest rates fall, precious metals that don't provide returns to their holders become more attractive.
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