Welcome to SurvivalBlog’s Precious Metals Month in Review, presented by Gainesville Coins. Each month, we take a look at “the month that was” in precious metals. We cover gold’s performance and the factors that affect gold prices.
What Did Gold Do in January?
Spot gold started the new year at around $2,060 an ounce. It dropped as low as $2,023 in the second week of the month as everyone rushed to dial back over-optimistic expectations of an interest rate cut in March.
Prices recovered to above $2,050 on the 15th before the bottom fell out, recording a $49 drop from $2,054 to $2,005 on the 16th and 17th.
Factors Affecting Gold This Month
JUMPING THE GUN ON RATE CUTS
Investors all realized at once in January that they had jumped the gun on expecting imminent rate cuts from the Fed, and prices had gotten ahead of the facts. They rapidly repriced assets across the spectrum, retrenching their bullish bets that the Fed would make its first rate cut in March.
The reversal hit its worst in mid-January, as everyone went into panic mode. The dollar hit a one-month high, Treasury yields jumped, and the odds of a March rate cut fell from 80% to 65% in one trading day. (Note: odds of a March rate cut are only THREE percent as of January 31st.)
Gold was caught up in the turmoil, falling from $2,051 to $2,006 over two days on the 16th and 17th. Prices stayed below $2,030 until the last of the month when April gold futures jumped to $2,067 before closing just before the FOMC announcement. Spot prices fell into the red in the aftermath of Fed chairman Powell’s press conference but rallied to just above unchanged by the end of the day.Continue reading“January 2024 in Precious Metals, by Steven Cochran”