Gold Crosses Key Level On Rate Cut Hopes

 Gold Crosses Key Level On Rate Cut Hopes

Gold (Xau/Usd) Crosses $2200 Level On Rate Cut Hopes

The DXY posted a sharp decline after the recent Fed meeting, during which the interest rate was kept unchanged. However, the Fed signaled that multiple rate cuts are coming in the year 2024.

This news sent the DXY lowered and allowed the Gold to shine once again as it has already crossed the $2200 level. After the Fed meeting, the DXY turned lower by 0.6% while metals like Gold and Copper recorded an upside.

Looking at Copper, in particular, shows that the metal is now sitting at 11-month highs, which is a sign of higher demand.

Spot Gold Up By 1.2%

However, the biggest benefactor of all was Gold, which is now sitting at record highs in hopes that rate cuts will be a few months away.

1.2% upside was seen in the Spot gold, which sent it near the $2222 handle. As for the Gold futures April contract, it is now trading at $2224 with an upside of 2% after the news.

little selling was seen in both instruments, but they are still above the $2.2K level collectively, which highlights the strength of the yellow metal.

At the Fed meeting, Jerome Powell commented on how inflation has shown stickiness as of late. However, this doesn't change the fact that inflation is indeed going down. Along with this, the Fed is also hinting at a 75 bps (0.75%) rate cut in 2024.

scenario like this is ideal for the Gold, Copper, Silver, & other metals. If we look back, Gold has been under pressure for the last 2 years on account of high-interest rates.

Now that the Fed meeting has concluded, there's now a 73.4% chance that the June meeting will render a rate cut. As for the growth prospects, the Fed now believes a 2.1% economic growth in 2024 is a high probability, while the earlier forecast was 1.4%.

As the Gold shines on hopes of rate cuts, other metals are also following lead. The Silver futures showed a +3.3% change while the Platinum futures showed a +0.9% increase.

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