The price of gold stabilized on Wednesday after a significant decline in the previous session, as statements from a Federal Reserve official weakened expectations of interest rate cuts in March.
The price of gold in spot transactions remained unchanged at $2027.62 per ounce by 0236 GMT, after a 1.3% decline in the previous session, which was the largest one-day drop since December 4th.
The price of the American gold futures contracts changed slightly to $2030.90.
Christopher Waller, a member of the US Federal Reserve Board, said on Tuesday that despite being “within close range” of the central bank’s inflation target of two percent, the bank should not rush to reduce the benchmark interest rate until it becomes clear that the decline in inflation will continue.
Market participants are eagerly anticipating further comments from officials at the US central bank this week.
Comments and sales operations sparked widespread sell-offs, leading to declines in the three major US stock indices. His statements pushed the dollar to its highest level in over a month, and US Treasury bond yields recorded their largest increase in over three months on Tuesday.
The increase in the value of the dollar will make alloys more expensive for holders of other currencies, while the higher interest rates will decrease the attractiveness of gold which does not yield any returns.
Market expectations for a reduction in interest rates in March declined to a probability of 62.2 percent, compared to 76.9 percent in the previous session, according to a CME FedWatch tool.
However, markets still bet on six interest rate cuts this year by 25 basis points each time.
On the front of other precious metals, silver, platinum, and palladium each decreased by 0.1 percent. The price of silver in spot transactions reached $22.89 per ounce, platinum was priced at $894.29, and palladium at $937.52. (Reuters)
