The value of gold experienced a positive increase on February 1, 2024, remaining in an upward trend. During the day, an increase of more than 25 dollars per ounce, equivalent to 1.25%, was recorded since the opening of the market in New York.
Traders have been attentive to several variables that have influenced the price of gold, such as the announcement of the U.S. monetary policy, macroeconomic indicators and conflicts between some countries in several regions.
To begin with, there is a possibility that the price of gold will maintain its upward trend, attributable to the likelihood that the U.S. Federal Reserve (FED) will reduce interest rates throughout 2024.
On January 31, 2024, Jerome Powell, Chairman of the Federal Reserve, after holding interest rates at 5.50%, ruled out the option of cutting rates during the first quarter of the year. However, he left the door open for future adjustments should U.S. economic indicators warrant it.
Although there is no perceived immediate need to lower interest rates, there is a possibility that a cut could be considered during the second quarter of the year. This change in outlook highlights the possibility of the Federal Reserve adopting a less restrictive stance in the future, showing greater flexibility in its approach to address potential economic challenges.
This increase in gold prices could also be attributed to certain macroeconomic indicators announced in the United States. On January 31, 2024, important Non-Farm Payrolls data was revealed from the National Employment Report (ADP) regarding January 2024.
This report generated immediate upward momentum by reporting a figure of 107k, in contrast to the expectation of 145k. Also, on February 1, 2024, Initial Jobless Claims, registering 224k compared to an expectation of 213k. The latter release had a significant impact on the gold price.
However, crucial data has yet to be released. On February 2, 2024, the government’s Nonfarm Payrolls data will be released, one of the most significant indicators within the employment report and considered a leading reflection of the overall state of the economy.
On the same day, the unemployment rate, which measures as a percentage the unemployed but actively seeking work and willing to work in the United States, will also be released. Depending on what is revealed in these reports, we could see notable movements in the gold market, either up or down.
Investors are keeping a close eye on the weekend’s events in the Middle East. The drone strike on U.S. forces in Jordan, which resulted in the tragic loss of three servicemen, marks the first deadly attack on U.S. forces since the start of the Israel-Hamas conflict.
These regional developments generate uncertainty in the markets as investors assess the potential impact of the situation in the region on global geopolitical and economic stability.
In conclusion, all this fundamental information has a significant influence on the so-called safe-haven asset. Traders are extremely alert to any developments that may impact the metal, as it acts as a sensitive indicator of significant geopolitical and economic events. The uncertainty generated by these key factors continues to be a determining factor in trading decisions related to this valuable metal.