Gold prices hit record highs as Fed sticks to interest rate forecast

Gold’s ounce price reached $2,222, breaking records as the Federal Reserve maintains its projection of three interest rate cuts totaling 75 basis points for this year

In the wake of gold prices dominating both domestic and foreign markets for weeks, new records are being set. The much-awaited March 2024 meeting of the Federal Reserve took place, where despite expectations, the decision to keep interest rates steady remained unchanged.

Following this decision, future projections and statements by Fed Chair Jerome Powell confirmed the expectation of “three interest rate cuts” for 2024. With dovish-toned statements, the price of gold per ounce surpassed $2,200, reaching all-time highs.

Gold prices on March 21

In the free market, the price started the day at TL 2,295 ($70.81) per gram and reached a peak of TL 2,307 during overnight transactions. At the Grand Bazaar, gold is more expensive, with a buying price of TL 2,506 and a selling price of TL 2,560 per gram.

A quarter gold coin is being sold for TL 4,373, a half gold coin costs TL 8,544, and a full gold coin costs TL 17,290.

Post-election uncertainty, the tendency to hedge against inflation, and concerns over import quotas keeping physical demand high maintain a significant gap between the free market and Grand Bazaar prices.

Expectations, targets for gold ounce prices

In the global markets, the price of gold per ounce soared to $2,222 after the Fed’s decision, marking an all-time record. Subsequently, the new day started close to $2,202. Gold’s 22-day average is at $2,126, and the five-day average is at $2,172, both figures indicating a bullish market.

Meanwhile, the dollar index (DXY) dropped from 104.15 to 103.20, and U.S. 10-year Treasury yields also decreased from 4.35 to 4.26, signaling a “partial loss of strength” in the dollar.

‘It’s too late to buy gold at this point’

Following the record prices, those holding gold, having gold debt, or planning weddings are pondering whether to “buy or sell gold.”

ALB Investment Chief Economist associate professor Filiz Eryilmaz pointed out that gold exhibited the strongest reaction to the Fed’s decision.

“It’s too late to buy gold at this point. However, potential declines may present opportunities. These pullbacks could occur based on the speeches of regional Fed presidents and US data, so investors should monitor them.”

Levels to watch for gold

“Those who couldn’t buy gold missed the train a bit. For both gram and ounce gold, every pullback is now a buying opportunity for medium and long-term investors. It may not be very likely for the price of an ounce of gold to fall below $2,150 after Powell’s statements,” Eryilmaz stated. 

Analysts also anticipate that TL 2,250 could now be a bottom for gram gold, according to free market prices, suggesting that the upward trend may continue in the medium and long term.

Source: Newsroom

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