The price of gold on the global stock market fell below $2,000 an ounce

The price of gold on the global stock market fell below $2,000 an ounce
The price of gold on the global stock market fell below $2,000 an ounce

Islam Saeed Books

Wed, May 17, 2023 10:42 AM

Gold returned to decline during trading today, Wednesday, after weak gains. This decline comes in light of statements by a number of members of the Federal Reserve that reduced the chances of cutting interest rates this year, in addition to tensions over the US debt crisis, according to Gold Billion.

Spot gold prices fell today, below $2,000, to record $1,990 an ounce at the time of writing these lines.

A number of members of the Federal Reserve commented on monetary policy conditions, and greatly reduced the chances of cutting interest rates this year, which reduces support for gold prices, and members of the Bank also indicated uncertainty about whether the Federal Reserve will temporarily stop raising interest rates at the June meeting. Next.

Fed member Neel Kashkari, President of the Federal Reserve Bank of Minneapolis stated that we should not be fooled by the soft inflation data over some recent months because inflation is still well above the bank’s target of 2%, and the bank needs to finish its job.

And Thomas Barkin, a member of the US Federal Reserve in Richmond, stressed that if the rate of inflation continues to accelerate, we could see new increases in interest rates.

It is reported that Fed Fund futures prices are pricing in a 79.9% chance that the Fed will stop raising interest rates in June. This probability has decreased from a high of 90% at the beginning of last week.

The technical report indicated that the possibility of higher US interest rates is negative for non-return assets such as gold, as it increases the opportunity cost of owning gold. On the other hand, fears of a US recession and a possible banking collapse are expected to support safe-haven demand for the precious metal.