Fed unleashes Gold’s biggest one-day move in 15-years – Where will prices go from here? [Video]
|There is no denying that the current macroeconomic backdrop is fuelling a “perfect storm” for Gold, positioning the precious metal as one of the best performing asset classes of 2023.
Last week, following months of elusiveness – Federal Reserve Chair Jerome Powell gifted Commodity traders with an early Christmas bonus – after delivering his clearest message yet, that the central bank is done with its aggressive hiking campaign and will start cutting interest rates in 2024.
Confirmation of the Fed's long-awaited pivot sent Gold prices skyrocketing from near the $1,970 mark to an intraday high of $2,049 an ounce – registering the precious metals biggest one-day percentage move in 15-years.
Throughout this year, we have seen Gold prices notching up explosive gains – in a single week – sometimes in a single day alone – not once, not twice, but on multiple occasions!
Just take this quarter for example. Gold prices have been on a parabolic run since mid-October – rallying from the $1,800 level to a new all-time record high of $2,152 an ounce – whipped up a whirlwind gain of over 19% in the space of two-months.
Is the rally over and has all the money been made?
Not by a long shot!
According to a growing chorus of leading Wall Street banks, the macroeconomic backdrop for Gold in 2024 is looking more bullish than ever before. The precious metals recent glittering performance points to a "tell-tale sign" that ultimately suggests that we could be at the beginning of a new major Supercycle for Gold.
Looking ahead, the major market-moving event that traders will be watching closely for clues on Gold’s next big move will be the final U.S PCE Inflation report of the year, due for release on Friday.
There will be a huge focus on Friday’s data, not only because it's the Fed’s preferred measure of inflation, but also because traders have already begun pricing in bigger-than-expected rate cuts in 2024.
Market consensus points toward a further easing of inflation to 3.3% year on year in November, down from 3.5% in the prior month. This outcome will boost optimism that the Federal Reserve could start cutting interest rates as early as the first quarter of 2024.
As traders know – “the bigger the rate cut, the bigger the rally in precious metals”.
If history is anything to go by, then Gold’s record-breaking performance this year is just a taster of what is yet to come. That’s welcoming news for the bulls, but painful for anyone sitting on the sidelines, who must now decide how much FOMO they can handle.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.