Today, gold prices are strong and will set their gains for the second week in a row. This is due to the weaker US dollar as the market is increasingly confident that the Fed is done with its interest rate hikes.
Spot gold prices remained at $1,992.46 per ounce. Gold bullion rose by 0.7% this week and the U.S. gold futures have little change to the level of $1,993.40.
According to KCM Trade Chief market analyst, Tim Waterer said that the latest trend in the financial market started to be directed towards the fall of the US dollar which has the potential to increase the value of gold.
The dollar index (DXY) slipped 0.2% and is now on track for a second week of decline. Indirectly, this makes the price of gold cheaper for holders of other currencies.
Markets have now downgraded the Fed's rate cut forecast for 2024 after the number of Americans filing new claims for jobless benefits fell lower than expected last week.
The US labor market is expected to slow due to interest rates remaining high. Although the employment data component was better than expected, the Fed's minutes indicated a cautious process in maintaining the current rate.
Additionally, traders expect the Fed to leave rates unchanged in December, giving a 26% chance of a cut as early as March next year.
Waterer said, the price of gold is still hesitant because market expectations and the Fed minutes do not have a positive similarity. Low interest rates will reduce the cost of holding gold.
