Gold’s Ounce Price Exceeds $2,464 Amid Fed Rate Cut Expectations
The price of gold per ounce surged by $42, surpassing $2,464, as expectations for a rate cut by the U.S. Federal Reserve in September strengthened. Forecasts that the Fed will soon begin lowering policy rates continue to impact asset prices significantly.
Federal Reserve Chair Jerome Powell’s recent comments on not wanting to delay rate cuts have clarified market pricing, solidifying the expectation that the Fed will reduce rates at least twice by the end of the year.
In a speech at the Washington Economic Club, Powell indicated that three data points from the second quarter had slightly increased confidence that inflation is dropping to 2%. Following the significant weakening of inflation in the U.S. in June and Powell’s dovish remarks, gold’s ounce price reached $2,464 today, marking its highest level since May 20th, with a $42 increase from the previous day.
The last record for gold’s ounce price was set in May, at $2,450.10. Earlier this year, gold prices reached historic highs due to demand from central banks. However, the prolonged expectation of high-interest rates had previously reduced investor interest in the precious metal.
Analysts suggest that a potential victory for Republican Donald Trump in the November 2024 U.S. presidential election could support higher gold prices. They note that Trump’s proposed tax cuts might increase the U.S. budget deficit, potentially weakening the dollar. These factors could drive investors towards safe-haven assets like gold.
Source: AA / Prepared by Irem Yildiz