Gold price World spot price closing on December 13 increased by 47 USD to 2,027 USD per ounce. This is the first time the price has returned to the $2,000 mark in several days.
The market soared at the end of the US session, after the US Federal Reserve (Fed) announced to keep interest rates unchanged for the third consecutive time, and it is expected that interest rates at the end of next year will be lower than currently. Estimates by Fed officials show that the reference interest rate could decrease by 0.75% from the current 5.25-5.5%.
World gold prices soared at the end of the session on December 13, after the Fed's announcement.
"The Fed's admission that inflationary pressures continue to decline has increased expectations of interest rate cuts. Lower interest rates will cause the USD and US bond yields to fall sharply. This is beneficial for gold and silver. We think gold's current upward momentum is sustainable", David Meger - Director of Precious Metals Trading at High Ridge Futures commented on Reuters.
The Dollar Index - which measures the greenback's strength against a basket of major currencies - fell 0.6% after the Fed's announcement. Yields on 10-year US government bonds also continued to decline.
According to CME's Fedwatch interest rate tracking tool, investors are currently betting that the likelihood of the Fed cutting interest rates in March 2024 is 60%. Falling interest rates also make zero-interest-paying instruments, like gold, more attractive.
US stock indexes also soared on December 13 after the Fed's decision. DJIA closed the session up 1.4%, setting a new peak at 37,090 points. The S&P 500 and Nasdaq Composite both increased by 1.4%.
Yesterday's developments helped increase the DJIA's year-to-date increase to 12%. The S&P 500 has also risen 22.6% and the Nasdaq Composite is up more than 40% this year.
"The main contents of the December policy meeting are that the Fed forecasts a soft landing in the US, the job market remains tight and is expected to reduce reference interest rates by at least 75 basis points this year. 2024 to support businesses. This is the best year-end gift the Fed gives investors, policymakers and the public", said Joseph Brusuelas - chief economist at auditing firm RSM. CNN.
Ha Thu (according to CNN, Reuters)
