In a sign of the overarching strength of the asset, the gold price has surpassed the $2030 mark despite the growing uncertainty of when interest rate cuts could occur. Indeed, the Federal Reserve is likely to begin issuing interest rate cuts this year. However, there are still questions as to when that could take place.
The price of gold is still expected to reach new highs in 2024. Its all-time high was reached in December of last year when it surpassed $2135 in the middle of the month. Many are still anticipating gains for the asset, but when those could occur depends on action taken by the Fed regarding rate cuts.
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Fed Red Cut Uncertainty Doesnt Derail Gold Price at $2030
Over the last several months, the presence of gold as an investment asset has been undeniable. Indeed, the metal is fresh off of its ascension to new heights in 2023. However, slower-than-expected action by the Federal REserve has limited its gains so far this year.
Still, that development hasn’t been the hamper on gold’s price as much as some have thought. Indeed, the gold price was still able to surpass $2030 despite uncertainty in the timing of Fed rate cuts expected this year. Many had assumed those cuts could come in March, but now predictions have identified May as a likely time for the Fed to begin its loosening campaign.
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Speaking to 60 Minutes, Fed Chair Jerome Powell insisted that interest rate cuts will arrive, but will be fewer than the market has anticipated. Moreover, Powell noted that Central Bank officials “want some more confidence” before cuts are made. Specifically, they are seeking evidence that inflation is moving toward its 2% goal.
Currently, the prevailing thought is that the Federal Reserve won’t cut interest rates until March. The Fed is currently concerned that action taken prematurely would cause more harm than good. For gold, the moment that cuts first take place should be beneficial to the asset as a whole. UBS has already predicted an ascension to $2,200 after cuts take place.