Honestly i didn’t expect gold at $3000 CAD this soon.

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Gold has surged to fresh all-time highs, echoing its record-breaking performance just a week ago when the Federal Reserve unveiled plans for three rate cuts throughout 2024. Since then, the precious metal has maintained its position near the pinnacle, as market participants brace for forthcoming US economic data that could sway the central bank’s monetary policy.

Lukman Otunuga, senior research analyst at FXTM, noted that gold appears to be in a holding pattern following a three-day rally, as investors adopt a cautious stance awaiting crucial US economic indicators. Among the key data points on the horizon are the weekly US initial jobless claims report and the US core personal consumption expenditure (PCE) price index report, scheduled for release later this week.

Otunuga pointed out that any indications of easing price pressures in the upcoming reports could reinforce expectations of Fed rate cuts, thereby bolstering demand for gold. Conversely, disappointing data could exert downward pressure on the precious metal. However, Fed Governor Christopher Waller has emphasized that recent economic indicators may warrant a reevaluation of the pace and magnitude of interest rate cuts.

In the midst of these developments, the price of gold has climbed above $3010 CAD, demonstrating resilience ahead of the release of the US core PCE Price Index data. Concurrently, the US Dollar has retreated from a six-week high, despite Waller’s more hawkish stance on rate guidance, making real the US$3000 milestone distant dream. This movement in the dollar comes even as the latest figures from the US Bureau of Economic Analysis reveal a modest upward revision in economic growth for the final quarter of 2023.

Looking ahead, the reaction of financial markets to the forthcoming economic data will likely shape expectations regarding the Federal Reserve’s future monetary policy actions. Any divergence from current market sentiments could prompt shifts in asset prices and investor sentiment as the debate over the trajectory of interest rates continues.

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