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The price of gold in the global market has increased at the start of trading in the US due to safe-haven demand amid escalating tensions in the Middle East. The weakening US dollar is a supporting factor for the rise in gold prices.
The long-term outlook for gold is positive. However, the upward momentum may be delayed as the market is trying to assess the possibility of a US interest rate cut. Lower interest rates reduce the opportunity cost of holding precious metals.
Currently, according to the CME FedWatch tool, traders expect a 47% chance of a Fed rate cut in March. This percentage has decreased from 71% last week, which is significant in the short term. In the future, the upward price momentum may decrease significantly.
The price of gold in the global market has increased at the start of trading in the US due to safe-haven demand amid escalating tensions in the Middle East. The weakening US dollar is a supporting factor for the rise in gold prices.
The long-term outlook for gold is positive. However, the upward momentum may be delayed as the market is trying to assess the possibility of a US interest rate cut. Lower interest rates reduce the opportunity cost of holding precious metals.
Currently, according to the CME FedWatch tool, traders expect a 47% chance of a Fed rate cut in March. This percentage has decreased from 71% last week, which is significant in the short term. In the future, the upward price momentum may decrease significantly.
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