- Gold price halts its winning streak amid a stable US Dollar.
- Gold price received upward support on speculation of a Fed rate cut in June.
- Fed Chair Powell reiterated at potential rate cuts sometime in 2024.
Gold price snaps its winning streak that began on February 28, correcting lower to near $2,160 per troy ounce during the Asian trading hours on Friday. The prices of yellow metal have been buoyed by market expectations of the Federal Reserve (Fed) potentially initiating an interest rate cut cycle starting in June.
The upward momentum in Gold prices was further strengthened by comments from Fed Chair Jerome Powell during his second day of testimony before the US Congress, where he reaffirmed the central bank's position, thus reinforcing the speculation surrounding potential rate cuts.
Fed Chair Powell has hinted at potential cuts in borrowing costs sometime this year, contingent upon the inflation trajectory aligning with the Fed's 2% target. According to the CME FedWatch Tool, there is a 5.0% probability of a 25 basis points rate cut in March, while the likelihood of cuts in May and June stands at 25.5% and 56.7%, respectively.
Cleveland Fed President Loretta Mester addressed the Virtual European Economics and Financial Center, expressing concerns about the potential persistence of inflation throughout the year. She indicated that if the economy aligns with forecasts, there could be a likelihood of rate cuts later in the year.
On the data front, US Initial Jobless Claims held steady at 217K for the week ending on March 1, against the expectations of 215K. Meanwhile, US Nonfarm Productivity remained consistent, maintaining growth at 3.2% in the fourth quarter of 2023, slightly surpassing market expectations of 3.1%.
Traders are eagerly anticipating Friday's employment data, which includes Average Hourly Earnings and Nonfarm Payrolls, to gain further insights into the economic situation in the United States (US).
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