Gold price outlook: Waiting for the US Federal Reserve's interest rate decision and possible effects on the market

Gold price outlook: Waiting for the US Federal Reserve's interest rate decision and possible effects on the market

According to a report by www.deraktionaer.de, the price of gold is firmer at the start of the new week. Nevertheless, according to experts, it is still too early to speak of a new upward trend. The US Federal Reserve's interest rate decision on Wednesday is seen as the next major event that will influence the markets and thus also the price of gold. It seems as if the interest rate discussion is currently largely determining the price of gold.

The probability of a rate cut in January is assessed as low by Fed Fund Futures, and the Fed Watch Tool also sees a 97.99 percent probability that interest rates will remain at current levels. The odds of a rate cut at the March meeting are estimated at around 50-50, and that probability could change after Wednesday's meeting.

In recent weeks, gold prices have taken into account that interest rate cuts may not occur as quickly as originally thought. It is expected that it could take until May before interest rates are cut. Around 11 percent of those surveyed expect interest rates to remain constant in May, while the rest expect them to fall.

Gold prices have corrected in recent weeks, which is not unusual after the year-end rise. However, this correction is expected to gradually come to an end and gold will reach a low in the coming days around the Federal Reserve meeting, from which it could rise towards new all-time highs.

As a financial professional, it is important to analyze this information and consider the potential impact on the market. Uncertainty regarding interest rate policy and the risk of recession in the US could continue to lead to volatile market conditions, which could also impact the price of gold. It is therefore advisable to monitor developments closely and adjust portfolios accordingly.