The US Federal Reserve (Fed) on January 31 did not create any surprises when it kept interest rates at a 22-year peak, at 5.25-5.5%/year, after a 2-day policy meeting.

Thus, this is the fourth consecutive time the Fed has kept interest rates unchanged.

Fed Chairman Jerome Powell also ruled out a rate cut in March.

Previously, the Fed had raised interest rates 11 times since March 2022 to curb inflation, which had reached a four-decade high of 9.1% in June 2022.

The US central bank is in no hurry to cut interest rates as the personal consumer expenditures (PCE) price index - the Fed's preferred inflation measure - increased by only 2.6% in December 2023.

The Fed's goal is still to bring inflation to its 2% target, although many forecasts suggest that the US will find it difficult to achieve this in the current context. The world is unstable and the US no longer has many advantages as before.

Fed Chairman Powell also expressed optimism about the US economy . This is a signal that the Fed has more room to continue fighting inflation. The US economy is still growing higher than expected, with the unemployment rate at only 3.7%.

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Gold prices continue to rise after the US decision not to raise interest rates.

In the previous meeting, the Fed said that it could reduce the reference interest rate by another 75 basis points in 2024, which means the Federal Funds Rate (FFR) will be at 4.5-4.75%/year.

With the Fed keeping interest rates unchanged and signaling no rate cuts at its March meeting, the USD continued to rise.

The DXY index - measuring the USD's volatility against six other major currencies - increased from 103.4 points in the previous session to 103.6 points.

US stocks came under selling pressure from recent highs and a stronger dollar. The broad S&P 500 index fell 1.6%, while the tech-heavy Nasdaq Composite index fell 2.2%.

USD increases rapidly, gold continues to climb

Gold prices continue to rise despite the strengthening of the US dollar. The world spot gold price on the morning of February 1 increased to nearly 2,040 USD/ounce (from 2,030 USD at the same time in the previous session). During the last night session (Vietnam time), the gold price at times reached 2,050 USD/ounce.

On the morning of February 1, the domestic price of SJC gold bars continued to increase and reached 78 million VND/tael.

Gold prices rose mainly due to rising tensions in the Middle East when three US soldiers were killed and 25 others were injured in a drone attack in northeastern Jordan, near the Syrian border.

The Biden administration is under pressure to retaliate against Iran, which is the first time American troops have been killed since the Gaza conflict began and has raised tensions across the Middle East.

The World Gold Council (WGC) has just forecast that it will increase sharply in 2024 and may reach a new peak. Previously, the WGC also said that central banks of countries continue to prolong the "gold shopping party".

Some forecasts suggest that gold could even reach $3,000/ounce (about VND90 million/tael) in 2024.