Gold: reached a record high driven by expectations of a drop in rates
Gold recorded growth of more than 1.5% on Friday, exceeding $2,070 an ounce, adding an all-time high and heading towards a third consecutive weekly rise, amid aggressive statements from Fed Chairman Powell and economic data Americans weaker than expected. Let's see a historical graph, with a 50-year horizon, which shows how much the current value of gold is higher than past values, even those of historical peaks such as the early eighties.
The cause of this boom is linked to the expectations of monetary policies, starting with that of the American Fed . Central bank officials have said it is premature to think about rate cuts as the underlying value remains high and the labor market resilient, but the trend seems set for the market, also because inflation is falling rapidly. The Fed itself admits that rates have now reached adequate levels.
Meanwhile, the latest economic data from the United States supported the prospects of lower rates. The ISM Manufacturing PMI fell short of estimates in November, signaling the thirteenth consecutive contraction in industrial activity. Additionally, US PCE inflation data indicated a slowdown in prices, while continued jobless claims reached their highest level in two years.
In Europe the inflation data were much lower than expected, and this, combined with economic data that was not particularly brilliant, suggests a decline in rates and therefore a less rigid monetary policy. The combined push of the expectations of lower rates in both America and Europe is increasing the values of assets, first of all gold, but Bitcoin, for example, is also growing, and yesterday exceeded +2%.
We will see assets inflate soon, and very significantly.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Gold: reached a record level driven by expectations of a drop in rates comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/oro-raggiunto-un-livello-record-sulla-spinta-dalle-aspettative-di-un-calo-dei-tassi/ on Sat, 02 Dec 2023 06:15:32 +0000.