The expectation that the North American Federal Reserve (Fed) will lower reference interest rates in June led the price of gold to reach a new historic high. The value per ounce (31.10 grams) reached 2,265.80 dollars (the equivalent of 2,099.28 euros at the current exchange rate) this Monday.
After leaving interest rates unchanged at the March meeting, it is now believed that the North American central bank will change the price of money in June, which has been leading investors to bet on an asset that is seen as a safe haven compared to others denominated in dollars.
Last Friday, despite consumer prices rising 0.3% in February, putting the annual rate at 2.5%, Fed Chairman Jerome Powell stated that inflation figures are now “more in line ” with those that are the objectives of the monetary entity of the United States of America (USA).
Even so, the dollar also rose this Monday (it was worth 0.9310167 euros) after data from the Institute for Supply Management (ISM) revealed that industrial production rose in March for the first time in a year and a half (first increase since September 2022), with an increase in the number of orders.
Reuters highlights that it was the longest period of contraction in industrial activity, which represents 10.4% of the North American economy, since the period from August 2000 to January 2002.
After rising sharply between 2022 and 2023 to contain inflation, the Fed’s interest rates stabilized at the end of last summer and, although they maintain a cautious stance, some central bank officials have signaled that there could be at least two 0 cuts. .25 percentage points by the end of this year.
In a statement released in January, when it announced that it would keep interest rates unchanged, the Fed warned that “the economic outlook is uncertain and the committee [de política monetária] continues to be very attentive to the risks of inflation”.
Only when there is “greater confidence that inflation is evolving sustainably towards 2%” will there be a reduction in interest rates, signaled the Fed.
The anticipation of the reduction in North American rates (which are in a range between 5.25% and 5.5%) will not, however, be the only reason that explains the appreciation of gold.
Speaking to CNBC, Caesar Bryan, portfolio manager at investment house Gabelli Funds, explained that, in China, “private investors have been attracted to gold due to the poor performance of the real estate sector” and the stock market.
