đ Record Highs: Gold and Bitcoin Soar Amid Market Dynamics
đ Breaking News: Gold Hits New Heights, Bitcoin Breaks $40,000 Barrier
In a dynamic market turn, gold has surged to a record high, reaching $2,135.39 an ounce, while Bitcoin broke the $40,000 barrier for the first time in 19 months, climbing to $41,267.53 during Asian trading on Monday.
đ° Market Insights:
Market analysts attribute the rally to growing bets on a US Federal Reserve rate cut, possibly as early as March. Kyle Rodda, Senior Market Analyst at Capital.com, notes, "Markets are piling in on the rate cut bets. Gold can run higher and will do so at the earliest sign of a recession."
đ Dollar Dynamics and Policy Impact:
Remarkably, the rally in gold and Bitcoin unfolds as the dollar edges higher. Despite this, two-year Treasuries, sensitive to policy shifts, maintain strong gains, with expectations that the Fed might cut rates as soon as March. Swaps indicate a full reduction by May and project a full point of easing by December 2024.
đŠ Federal Reserve's Stance:
Federal Reserve Chairman Jerome Powell's reminder that policymakers are not in a hurry to ease interest rates hasn't deterred the rally. Powell stated that while the central bank is prepared to raise rates if needed, policy is already "well into restrictive territory."
đđ Market Reflections and Outlook:
US stocks closed at their highest since March 2022, and two-year yields hit their lowest since June. However, Shane Oliver, Head of Investment Strategy at AMP in Sydney, cautions that the big rebound in shares may lead to a consolidation or short-term pullback.
đ Global Economic Signals:
The Reserve Bank of Australia is expected to maintain its rate on hold, with a tightening bias due to "sticky 'home-grown' services inflation," according to Tony Sycamore, an analyst at IG Group in Sydney.
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