Despite the robust US economic data – the sustainable goods of February rose by 0.9% and the sustainable core products achieved 0.7% – the US dollar is under mild pressure. The weakness of the Greenback is largely attributed to a shift in the expectations of monetary policy. Dovish signals of the FED have priority over stronger data, which are based on the rise in Gold.
The expectations of the fed rate expectations get the momentum
The Federal Reserve has revised its growth ear spelling down for 2025 and now expects two 25-base point reductions, with reference to uncertainty about current trade measures. Fed officials remain caution with regard to inflation. Neel Kashkari noted the progress in the direction of the 2%inflation goal, but emphasized the need to further tighten if the trade policy is caused the price pressure.
Austan Goolsbee added that persistent inflation risks could delay the cutbacks, while Alberto Musalem claimed that restrictive policy is still needed to anchor the inflation expectations.
Markets now turn to the US Data Slate on Thursday, which includes the last reading of the GDP of the Q4, weekly unemployed claims and awaiting the sale of home. On Friday’s price index (PCE) on Friday, however, remains the most important event for traders. As the favorite inflation meter of the FED, this can significantly influence the timing of speed adjustments.
Precious Metals retain bullish prospects
With escalating trade risks and Dovish monetary policy signals, gold and silver remain well supported. Technical and macro -fundamentals vote to keep precious metals attractive, in particular because traders are looking for portfolio protection in the midst of geopolitical and economic uncertainty.