Gold reached a new peak, trading above the previous all-time high of $2431, but quickly fell back below that level after Fed officials indicated that rate cuts are not imminent.

Atlanta Fed President Raphael Bostic highlighted the strong inflationary pressures of Q1, reiterating that more work is needed, though he expects inflation to ease into 2025. Governor Michael Barr echoed these sentiments, while Governor Philip Jefferson noted the encouraging lower inflation figures for April. In summary, the officials conveyed a preference to maintain high interest rates until they are confident inflation is on track to meet targets.

Markets have adjusted their expectations, stepping back from predicting two rate cuts this year, and now anticipate a likely rate cut in November instead of September. It’s worth noting that the Fed typically avoids policy changes during presidential elections, so the FOMC will likely consider changes in either September and December or in 2025.

GOLD RETREATS FROM NEW RECORD HIGH AS FED SPEAKERS DAMPEN RALLY

May 22 2024

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