Gold records its highest levels in more than a month as Trump's inauguration approaches and following inflation data.

Gold prices rose during trading on Thursday, continuing to expand gains for the third consecutive session, following the release of U.S. inflation data and renewed expectations for further interest rate cuts by the U.S. Federal Reserve this year.

Current Gold Prices

In terms of trading, spot gold prices increased by approximately 0.42%, recording $2,707.57 per ounce, while February futures gold contracts rose by about 0.73%, reaching $2,737.70 per ounce.

As for other metals besides gold, silver futures prices increased by 1.20%, reaching $31.91 per ounce, while spot platinum prices steadied at $943.05 per ounce, and palladium futures prices declined by 0.65% to $946.82 per ounce.

What affected gold movements today?

The increase in gold prices today was primarily driven by U.S. inflation data released yesterday, which showed a surprising slowdown in core inflation, increasing expectations for further Federal Reserve rate cuts this year, after markets were initially pricing only one cut throughout the year prior to the data.

The likelihood of the U.S. Federal Reserve cutting interest rates more this year rose following the inflation data, with market participants pricing in greater chances that the Fed would reduce rates twice by the end of this year, with the first cut expected in June.

Commenting on the data, U.S. Federal Reserve members confirmed that the data indicated U.S. inflation continues to slow, even as uncertainty increases in the upcoming months due to Trump administration policies.

The U.S. dollar lost some of the strong upward momentum it had seen in recent weeks, trading relatively stable during today's transactions, with bond yields declining due to the slowdown in U.S. data, providing some support to gold prices denominated in dollars as the cost of holding them decreases.

At the same time, gold also received some support from the uncertainty surrounding the upcoming inauguration of President-elect Donald Trump next week, with growing concerns that proposed tariffs and trade policies may fuel inflation and ignite trade wars, enhancing gold's appeal as a hedge against inflation.

The broader outlook for gold prices remains positive, supported by geopolitical uncertainty and continued purchases by central banks.

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