Fed Comments Rock Markets: Gold Rises, Dollar Stumbles by Investing.com

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Investing.com – It took off again after a dip on Wednesday, especially after comments from the Federal Reserve Bank of Atlanta about holding back the interest rate hike.

The gains instead stopped during yesterday’s violent wake, Wednesday, to stop at 111 levels, along with the decline in the return on.

stop lifting

The president of the Federal Reserve Bank of Atlanta believes the central bank may stop raising interest rates after the next meeting in December.

“Ideally, I would like to get to a point where monetary policy is moderately tight,” Rafael Bostik said in a speech at Northwestern University. “This represents an interest rate of between 4% and 4.5% by the end of this year, and then stop Raising interest to monitor the reaction of the economy and prices.

The Fed chief in Atlanta believes the US economy is still in an inflationary phase, noting that it will take some time to bring inflation to the 2% target.

The Atlanta Fed chairman has indicated that he does not support the idea of ​​a rapid shift towards lower interest rates.

The Federal Reserve has raised interest rates 5 times since the beginning of this year, to reach the 3% and 3.25% range, with its members’ average expectations that interest rates will reach 4.6% by Next year.

gold now

The US dollar rose during trading today, Thursday, to levels close to $ 1725, an increase of about $ 9, an increase of about 0.5%.

On the other hand, gold in futures contracts has risen during trading today to levels above $ 1730 an ounce, an increase of about 06%, or the equivalent of $ 10 an ounce.

dollar now

Side by side, the major dollar index fell against a basket of major currencies during Thursday’s trading, to levels below 111 points, down 0.1%.

The yield on 10-year US Treasuries fell during today’s trading in the range of 0.002 to 3.755%, which gave the yellow metal another boost to the upside.

Market prospects

City Index analyst Matt Simpson said gold could break out of the $ 1,735 resistance in case of weak US employment data.

He added that markets are very sensitive to employment data at the moment and US data today showed that the US private sector added 208,000 jobs, more than the expectations of 200,000 jobs.

This is expected to be followed by US Department of Labor non-farm payroll data, which is scheduled to be released on Friday.

“If it fails, traders on Friday will likely assume weak nonfarm staff performance, which could weaken the dollar as traders become more enthusiastic about the Fed’s pivot, potentially raising gold prices,” Simpson said.

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