Gold Moves Higher Amid Interest Rate Hike Expectations

Gold prices rose globally during these moments of trading on Tuesday, as investors await interest rate decisions from a number of central banks, as well as a large number of economic data in the United States this week.

However, the decline in the US dollar index during today’s trading caused gold priced in the US currency to become more attractive to holders of other currencies.

Gold and the dollar now

Gold futures are now up 0.5% to $2,032 an ounce.

Spot gold contracts are up about 0.45% to $2,031 an ounce.

On the other hand, the dollar index is down 0.23% to 102.88 points

Other metals

Silver rose 1.1% to $22.33 an ounce in spot trading, platinum also rose 1.1% to $902.36 an ounce, and palladium rose 0.9% to $944.47 an ounce.

Yen reacts positively after an expected decision from the Bank of Japan

The yen rose in the Asian market on Tuesday against a basket of global currencies, continuing its gains for the second consecutive day against the US dollar, as recovery operations continue from the lowest level in two months, as well as the currency’s positive interaction after a decision expected from the Bank of Japan in the conclusion of the first monetary policy meeting of 2024.

The bank held on to all of its ultra-easy monetary tools without any change, especially the negative interest rate, to remain the only bank in the world that applies this type of interest rate, without providing any evidence about the likelihood of normalization this year.

The Bank of Japan

In line with expectations, the Bank of Japan decided today, Tuesday, not to make any changes to the tools of the loose monetary policy, and to keep interest rates unchanged at the standard level of negative 0.1%.

As for the policy of controlling the yield curve of government bonds (YCC), the Bank of Japan decided to keep the targets for the yield of ten-year government bonds unchanged at 0.00%, while keeping the maximum yield at 1.0%.

The bank confirmed that the control of the yield curve of government bonds continues to work with greater flexibility up and down, and that the lower (0.00%) and upper (1.0%) yield limits are a reference point, and not as strict limits in open market operations.

The Bank of Japan said that it is currently appropriate to keep the monetary policy unchanged to support economic recovery in the country, and confirmed its continued purchase of government bonds on a large scale, and explained that it will not hesitate to take additional easing measures if necessary.

The current rise in yen levels is supported by the continued slowdown in the yield on US Treasury bonds due in ten years, pending further evidence on the future path of interest rates in the United States.

Oil stabilizes amid mixed indicators on supply and cautious expectations about China

There was little change in oil prices on Tuesday, as traders are studying a set of conflicting worrying data on both the supply and demand sides, with rising tensions in the Middle East and problems due to cold weather causing disruptions to production in the United States.

In the Middle East, US and British forces carried out a new round of strikes targeting an underground storage site for the Houthis and missile and surveillance capabilities used by the Houthi group allied with Iran.

The attacks that the Houthis launched on ships in the Red Sea and its surroundings have disrupted global shipping and raised inflation concerns. The group says its attacks are in solidarity with the Palestinians as Israel bombs Gaza.

Currently, concerns about recession, the impact of severe weather on US oil production, and the escalation of geopolitical conflicts are still supporting oil prices.

Current markets:

US crude oil falls 0.48% to $74.15 a barrel.

Gold rises 0.20% to $2,026 an ounce.

The Dow Jones remains at 38,026 points.

The Nasdaq remains at 17,344 points.

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Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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