Gold continues to rise again, entry buy today

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World gold prices increased slightly with spot gold increasing by 5.5 USD to 2,036.6 USD/ounce. Gold futures last traded at 2,055.5 USD/ounce, up 6.5 USD compared to yesterday morning.

World gold rose to a two-week high on Tuesday as it was supported by dollar weakness and lower Treasury yields while focus turned to the Federal Reserve's policy meeting. US State (Fed) to better understand how this agency will cut interest rates this year.

According to RJO Futures senior market strategist Daniel Pavilonis, much of gold's volatility is due to falling yields and the dollar being in the red. However, Pavilonis said that expectations about interest rate decisions also caused gold to increase.

The Fed's policy decision will be made on Wednesday. Markets are expecting the US Central Bank to leave interest rates unchanged at the end of the meeting. Pavilonis, the Fed said that, with the desire to have a stable market, the Fed may not conduct many interest rate cuts and Mr. Powell will also maintain a neutral attitude.

Data last week showed U.S. prices grew moderately in December, keeping annual inflation below 3% for the third straight month and potentially allowing the Fed to start cutting interest rates.

According to senior analyst Ricardo Evangelista at ActivTrades, the Fed's monetary policy stance is currently the most important driver of gold prices. He said that even the safe-haven appeal of precious metals cannot counter changing market expectations around central bank monetary policy.

According to this expert, the market's expectation that the Fed will actively cut interest rates could push gold to $2,200/ounce with an average annual price of up to $2,100/ounce.
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In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
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