Dear Ziilllaatraders
Wall Street Pricing in Rate Cuts in 2024:
When Wall Street "prices in" rate cuts, it means that market participants and investors are anticipating that the Federal Reserve (the central bank of the United States) will lower interest rates in the future, specifically in 2024 in this case.
Lowering interest rates is a monetary policy tool used by central banks to stimulate economic activity. When interest rates are lowered, borrowing becomes cheaper, encouraging businesses and consumers to spend and invest more. This increased economic activity can lead to higher inflation, and historically, gold has been seen as a hedge against inflation. Investors often turn to gold as a store of value when they expect the value of traditional currencies to decrease due to inflation. As a result, if Wall Street is anticipating rate cuts in 2024, some investors might increase their demand for gold, thereby driving up its price.
Formation of the BRICS Backing Currency with Gold:
The BRICS is an acronym for a group of five major emerging economies: Brazil, Russia, India, China, and South Africa. These countries often collaborate on economic and political matters. If the BRICS were to collectively back their currencies with gold, it would mean that they are using gold reserves to support the value of their currencies. This move would signal a lack of confidence in traditional fiat currencies and could lead to increased demand for gold on a global scale.
When multiple countries or a significant portion of the global economy start backing their currencies with gold, it can create greater demand for the metal, potentially driving up its price. The scarcity of gold compared to the increasing amount of currency in circulation can contribute to its value rising.
In summary, the XAUUSD price could increase due to a combination of Wall Street's anticipation of rate cuts leading to increased demand for gold as an inflation hedge, and the formation of the BRICS backing their currencies with gold, which could further boost global demand for the metal. However, it's important to note that these are complex factors influenced by a wide range of economic, geopolitical, and market variables, and predicting exact price movements is challenging
Greetings,
Ziilllaatrades
Wall Street Pricing in Rate Cuts in 2024:
When Wall Street "prices in" rate cuts, it means that market participants and investors are anticipating that the Federal Reserve (the central bank of the United States) will lower interest rates in the future, specifically in 2024 in this case.
Lowering interest rates is a monetary policy tool used by central banks to stimulate economic activity. When interest rates are lowered, borrowing becomes cheaper, encouraging businesses and consumers to spend and invest more. This increased economic activity can lead to higher inflation, and historically, gold has been seen as a hedge against inflation. Investors often turn to gold as a store of value when they expect the value of traditional currencies to decrease due to inflation. As a result, if Wall Street is anticipating rate cuts in 2024, some investors might increase their demand for gold, thereby driving up its price.
Formation of the BRICS Backing Currency with Gold:
The BRICS is an acronym for a group of five major emerging economies: Brazil, Russia, India, China, and South Africa. These countries often collaborate on economic and political matters. If the BRICS were to collectively back their currencies with gold, it would mean that they are using gold reserves to support the value of their currencies. This move would signal a lack of confidence in traditional fiat currencies and could lead to increased demand for gold on a global scale.
When multiple countries or a significant portion of the global economy start backing their currencies with gold, it can create greater demand for the metal, potentially driving up its price. The scarcity of gold compared to the increasing amount of currency in circulation can contribute to its value rising.
In summary, the XAUUSD price could increase due to a combination of Wall Street's anticipation of rate cuts leading to increased demand for gold as an inflation hedge, and the formation of the BRICS backing their currencies with gold, which could further boost global demand for the metal. However, it's important to note that these are complex factors influenced by a wide range of economic, geopolitical, and market variables, and predicting exact price movements is challenging
Greetings,
Ziilllaatrades
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.