S&P 500, gold make fresh highs after confident Powell, lower inflation rate
Data current as of 4/1/2024
Key points
S&P 500 hit new highs near $5,300
Gold price nears new high $2,300
Similarly, Gold futures have surged almost $100 in the past week, hitting all-time highs near $2,300. This rally in gold prices is indicative of the metal's status as a safe haven amid current economic uncertainties. As investors seek stability, gold's ascent speaks to the broader search for assets that can hedge against potential market volatilities. Though historically more range-bound, in recent months gold prices have not only moved comfortably through $2,000 for the first time, but $2,100 as well.
Powell says, "US economy is growing at such a solid pace"
Federal Reserve Chair Jerome Powell highlighted the robust growth of the US economy in recent comments, emphasizing the Fed's hesitancy to implement rate cuts due to this strength. Powell’s remarks underline confidence in the ongoing economic recovery, suggesting a cautious approach to monetary policy adjustments moving forward. While still forecasting three rate cuts this year, investors are now led to believe they could begin later in the year.
US inflation rate lowest since March 2021
Friday's report shows the Core Personal Consumption Expenditures (PCE) inflation rate has fallen to 2.8% in February, marking its lowest point in nearly three years. This 0.1% decrease from January is reassuring to the Fed as it builds confidence that inflation is unlikely to make an unexpected drop through 2%.
US dollar appreciates to recent highs on relative strength
The US dollar has appreciated to recent highs, bolstered by signs from the European Central Bank (ECB) that rate cuts may occur "before the US" This dynamic demonstrates the dollar's relative strength against a backdrop of global monetary policy shifts, impacting forex markets and international trading strategies.
How to trade US dollar
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on USD pairs
Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
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