The European Central Bank (ECB) has officially lowered its key interest rate to 3.75%, marking the first cut since 2019. The ECB emphasized that interest rate reduction is necessary to support growth. economy and ensure that inflation is maintained near the central bank’s 2% target.
World gold price increased to the highest within 2 weeks. Photo: HH
Gold prices are also well supported by the weakening of the USD and falling Treasury yields after the latest data showed the US labor market cooling.
According to the US non-farm private employment (ADP) report, private companies created an additional 152,000 jobs in May, much lower than the number recorded last month and the world’s forecast. expert. This is the lowest monthly figure since January.
RJO Futures senior market strategist Bob Haberkorn said weak labor numbers act as a catalyst that could cause the US Federal Reserve (Fed) to cut interest rates before the end of the year. This has increased the appeal of gold.
In addition to monetary policy expectations, experts say that gold is being supported by strong buying demand from central banks. Net purchases by global central banks rose to 33 tonnes in April, the World Gold Council said, continuing to be strong despite rising precious metal prices.
Gold price forecast
According to the CME FedWatch tool, traders now see about a 67% chance the Fed will ease monetary policy in September, up from less than 50% last week.
According to market analyst Tim Waterer of KCM Trade, if upcoming employment reports increase, the Fed will loosen monetary policy into November. Conversely, if it decreases, there is a possibility of cutting interest rates in September. is possible.
Experts predict that the upcoming Fed meeting will likely keep interest rates stable in the context that inflation in the US remains high.