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All Eyes on Gold as Fed Meets Amid Geopolitical Tensions

Gold Prices Stuck in Neutral Ahead of Fed Meeting

Important U.S. economic figures and the Fed’s meeting this week could have a big effect on gold prices in the next few days. As things get more tense in the Middle East, all eyes are on the yellow metal.

Middle East Wars

Tensions have grown in the Middle East, which makes gold even more appealing as a safe- haven. They are firing at each other in the worst fighting, Israeli troops are slowly moving into Gaza for a ground attack to get rid of Hamas. Any war puts the world economy at risk and often makes gold more valuable.

The Fed is likely to raise rates for the second time this year. The price of gold is always going up because people think the Federal Reserve will keep interest rates the same.  Fed officials have been in Favor of keeping interest rates the same at 5.25 to 5.50 percent because US long-term bond yields are higher and price pressures have been steadily falling. However, signs that economic growth is slowing down could make more people want the metal as a safety net in case the market goes down.

Rising global tensions and dovish Fed signs are needed for gold to break higher. As buyers wait for the Fed to announce its monetary policy, the price of gold stays in a narrow range of around $2768.63 CAD. Hold on tight, the ride is about to get crazy!

Critical Economic Data, Fed Policy Stance to Determine Gold’s Next Move

What the Fed Says Matters

The Federal Reserve may maintain interest rates higher longer due to rising consumer spending and tight job market conditions, which might keep inflation high.

Jobs and GDP Data

Around 150K private employment were created, up from 89K in September. Manufacturing PMI remains below 50.0 for the 12th month in a row at 49.0. Bright growth and solid consumer spending are helping US industry and services recover quicker. Goldman Sachs predicted 1.6% GDP growth in the fourth quarter of 2023 and 1.7% in the first quarter of 2024.

Results

End of story. Tense markets with investors caught in a bind. Does gold feel safe as global tensions rise and the Fed maintains rates? Do you bet on riskier assets expecting tensions to ease, data improve, and the Fed to tighten? No simple answers, folks. Gold dominates while the world waits. We know markets will be tumultuous in the next few days. Hold on!

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