Home » Gold trading reminder: Investors reduce their bets on the Federal Reserve’s early interest rate cut, and gold prices test the 100-day moving average provider FX678 for six consecutive days.

Gold trading reminder: Investors reduce their bets on the Federal Reserve’s early interest rate cut, and gold prices test the 100-day moving average provider FX678 for six consecutive days.

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Gold trading reminder: Investors reduce their bets on the Federal Reserve’s early interest rate cut, and gold prices test the 100-day moving average provider FX678 for six consecutive days.

Investors are reducing their bets on the Federal Reserve’s early interest rate cut, causing gold prices to test the 100-day moving average for the sixth year in a row.

Spot gold was barely holding above the 100-day moving average of $1,990.56 and was trading around $1,993.41 per ounce during early Asian trading on Thursday (February 15). This comes after U.S. inflation data was higher than expected, prompting investors to lessen their bets on the Federal Reserve cutting interest rates.

Bob Haberkorn, senior market strategist at RJO Futures, noted that the overall trend for gold prices is choppy and indicated that further confirmation is needed for the Federal Reserve’s possible decision not to cut interest rates anytime soon. Data released on Tuesday showed U.S. consumer prices rising more than expected in January, increasing 3.1% year-on-year.

Currently, investors are anticipating three rate cuts of 25 basis points each in 2024. This is consistent with the Federal Reserve’s dot plot released in December, which previously expected four rate cuts. The probability of the Federal Reserve keeping interest rates unchanged in March is 89.5%, while the probability of cutting interest rates by 25 basis points is 10.5%.

The release of U.S. retail sales and producer price index (PPI) data due on Thursday and Friday will be key for investors, as well as speeches from officials at least five Federal Reserve officials who are scheduled to speak this week.

Following strong CPI data, U.S. Treasury yields and the U.S. dollar surged, which weakened hopes for an early interest rate cut. As Gold came under immediate pressure, analysts point out that it now looks extremely unlikely for the Federal Reserve to quickly lower borrowing costs if other economic data remains strong. Additionally, Kinesis Money reported that a break below current levels could result in further losses in silver. Conversely, a rebound would help solidify technical support at $22.

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