Wall Street is Currently Swept up in a Gold rush.

Wall Street is Currently Swept up in a Gold rush, The cost of gold surged on Tuesday, March 5 2024 reaching a new peak at $2,141.90 per troy ounce, fueled by investor anticipation of potential rate cuts by the Federal Reserve later this year.

Goldbugs Rejoices

Goldbugs rejoices as Wall Street is Currently Swept up in a Gold rush. Gold is valued for its resilience, especially when interest rates decline, making it a preferable investment over income-producing assets like bonds.

Some investors view gold as a safeguard against inflation, believing it will retain its worth even in times of rising prices.

Beyond traders, even large retailers like Costco have joined the gold market, selling over $100 million worth of gold bars in the first quarter of 2024.

This trend reflects the enduring appeal of gold during periods of global economic uncertainty, as it is seen as a tangible and relatively stable asset compared to stocks.

The Personal Consumption Expenditures price index, favored by the Fed for measuring inflation, climbed by 2.4% over the 12 months ending in January.

This marks a slight slowdown from December’s 2.6% uptick and aligns with economists’ forecasts, according to recent data from the Commerce Department.

On a monthly basis, the core PCE price index, which excludes the more volatile food and energy sectors, increased by 0.4%.

While this uptick matched expectations, the index, considered by Fed officials as a key measure of underlying inflation, saw its quickest monthly growth since February 2023.

Bitcoin also turns higher

Bitcoin, often hailed by its dedicated supporters as the digital equivalent of gold, has experienced a significant surge in recent weeks.

On Tuesday, the cryptocurrency surpassed its previous record of $68,789 set on November 10, 2021, breaking free from a two-year downturn fueled by the introduction of spot bitcoin ETFs, which propelled its rally.

However, Bitcoin retreated from its peak on Tuesday. In other markets, stocks have enjoyed substantial gains this year, although the momentum slowed somewhat this week.

The S&P 500 index has repeatedly reached new record highs, and the Nasdaq Composite index attained an all-time peak for the first time since 2021 last week, driven by the ongoing boom in artificial intelligence on Wall Street.

At present, traders estimate there’s approximately a 69% likelihood that the Fed will reduce rates at its June policy meeting, as indicated by the CME FedWatch Tool.

This represents a decrease from the beginning of the year when investors were more convinced about imminent rate cuts.