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November 10, 2024
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Gold Price Falls Below $2000 For First Time in 2024


In what is certainly a vital move for investors, the gold price has dropped below $2000 for the first time in 2024. The value decline took place after the release of US inflation data that shows the level fell to 3.1%. Although that is a noticeable drop from December’s 3.4%, it was higher than expectations.

Predictions called for US inflation to drop below 3%, which would have been the first time the figure fell below the mark since 2021. However, that was not the case. Subsequently, the US Dollar reached a three-month high, and gold rose to a two-month high proceeding hours.

gold bars

Also Read: Gold Prices Hold Steady at $2,031 Amid Hawkish Fed Policy

Gold Price Drops Below $2000 After January Inflation Data

After reaching an all-time high price of $2135 in mid-December of last year, there were high hopes for gold in 2024. Indeed, many projected the asset would sustain a place above the crucial $2100 mark for several months. Especially as the Federal Reserve signaled impending interest rate cuts in the first few months of the year.

However, in just one month the asset has already fallen below the key psychological level. Specifically, the gold price has fallen below $2000 for the first time in 2024. Moreover, that drop coincided with the release of January consumer price data that shows inflation fell to 3.1% last month.

Source: CNN

Also Read: Gold Price Passes $2030 Despite Fed Rate Cut Uncertainty

The fall was likely due to the strong inflation figures lessening the prospects of interest rate cuts coming in March. Indeed, expectations are now stating it could be much further, as such cuts may not take place until after May. This could indicate that the price of gold will face a bit of a downswing over the next month.

Reuters reports that Fed policymakers are likely to delay interest rate cuts until June. The report notes that officials are waiting for easing price pressures before they commit to interest rate cuts. However, with the current trajectory of consumer data, they may need to wait quite a bit longer.

The Federal Reserve has been consistent about its ongoing balancing act. Indeed, the Central Bank officials have noted the desire to cut interest rates, but the worry of cutting them too early. Many expect the gold price to increase significantly when those cuts take place. However, its ability to sustain its current level in the meantime remains to be seen.



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