GOLD OPINION (07-23-2024)

President Biden announced he won't run for re-election, and people in the markets are reacting. At first, the reaction was calm, and the price of gold briefly went up before falling to $2385.20 and then slightly recovering.

If Trump becomes president again, it might be good for gold prices because of possible inflation and international issues. But it's too early to make any big investment moves right now.

Everyone's now waiting for important economic reports coming later this week. On Thursday, the U.S. will release its gross domestic product (GDP) data for the second quarter, and on Friday, the Personal Consumption Expenditures (PCE) report will come out. The PCE report is crucial because it shows the latest inflation data, which the Federal Reserve will use before their meeting on July 31.

Experts think inflation increased by 2.5% last month, down slightly from 2.6% in May. This might mean the Federal Reserve will keep interest rates the same at their upcoming meeting, with a very low chance of a rate cut.

However, looking ahead to September, there’s a high chance (91.2%) that the Federal Reserve will cut rates by a quarter-point. There’s only a small chance they will keep rates the same (5.8%) or cut by half a point (2.4%).

As traders wait for these reports, gold prices are likely to be influenced by changes in expectations about monetary policy and political events. Gold is often seen as a safe investment, especially during uncertain economic times and political changes.