The price of gold increased by 1% as the likelihood of a US rate hike decreased

 

The price of gold increased by 1% as the likelihood of a US rate hike decreased
The price of gold increased by 1% as the likelihood of a US rate hike decreased


The price of gold increased by 1% as the likelihood of a US rate hike decreased.


Gold prices rose to their highest level in more than nine months on Friday, settling above $1,900 an ounce. This was caused by news of lower inflation in the United States, which suggests that the Federal Reserve may not raise its interest rates as quickly as previously thought.

The price of gold rose 1.1 percent to $1918.09 per ounce at 6:12 p.m. GMT.

Gold has risen by 2.8 percent this week, making it the fourth week in a row that it has gone up.

U.S. gold futures increased by 1.1% to $1,920.10.

In December, US consumer prices dropped for the first time in over two-and-a-half years, according to data released on Thursday.

Members of the Federal Reserve were relieved to see that inflation decreased in December, which will likely lead to a rate cut of 25 basis points at the February meeting.

The price of silver increased by 2%, reaching $24.25 per ounce.

Platinum and palladium both dropped in price this week, with platinum decreasing by 0.6% to $1,061.62 and palladium falling by 0.9% to $1,775.50 (earlier reaching a low of $1,727).


Gold prices have recently reached their highest level in nine months. Could a new record be on the horizon?
Gold prices have recently reached their highest level in nine months. Could a new record be on the horizon?


Gold prices have recently reached their highest level in nine months. Could a new record be on the horizon?

Gold prices rose to a nine-month high on Friday, coming close to the key resistance level of $1,950 an ounce. This was due to low US inflation and expectations of a low interest rate hike creating demand for gold as a safe investment.

Gold futures on the New York-based Comex rose 0.9% to $1,915 a troy ounce by 12:02 ET (17:02 GMT) on Thursday, reaching the highest level since April 25's peak of $1,935.50.

Since the start of 2023, the US gold futures contract has increased in value by almost 5%, building off increases of 4% in December and 7% from November.

Gold prices increased today, reaching a peak of $1,916.59 - the highest since April 25th. The spot price of gold is currently at $1,911.73, which is an increase of $14.82 or 0.8%.

Gold prices have risen over the past three months due to low levels of inflation. This has caused bond yields and the value of the dollar to decrease, because investors anticipate that the Federal Reserve will not raise interest rates as much this year compared to next, and may end its monetary tightening before 2021 ends.

Gold prices have been increasing recently due to growing optimism regarding the Federal Reserve's interest rate policy. This rise has been caused by a decrease in US Treasury yields and weaker than expected corporate earnings reports. According to Ed Moya, an analyst at online trading platform OANDA, these factors are causing the price of gold to increase.

On Friday, the yield on the 10-year US Treasury note was 3.47%, down from its October peak of 4.34%. Meanwhile, the dollar index hovered just above 102, having fallen from its highs in September of over 107 against six major rival currencies including the euro and yen.

The University of Michigan's survey of consumers reported on Friday that Americans' expectations for inflation have declined for four consecutive months, reaching 4.0% in January 2021 - the lowest since April 2021.

In December, the Consumer Price Index (CPI) indicated that inflation had risen 6.5% over the past 12 months - the slowest rate of increase since October 2021. This was announced by the US Department of Labor on Thursday.

In June, the Consumer Price Index (CPI) reached its highest level in 40 years, with an annual rate of 9.1%, far above the federal inflation target of 2%. To stem this rise in prices, the Federal Reserve increased interest rates by 425 basis points since March through seven rate hikes. Prior to the outbreak of COVID-19 in 2020, interest rates were at a record low of 25 basis points. In an effort to contain inflation, the Fed raised rates by 75 basis points each month from June to November before slowing down to just 50 basis points per month in December.

Economists predict that the central bank will raise interest rates by 0.25% on February 1.

The Federal Reserve last raised interest rates by 0.25% in March 2022, beginning the current rate hike cycle.

Moya, an analyst at OANDA, stated that if gold closes above the $1,900 mark, it could be a positive sign for the remainder of the month. He believes there will be strong opposition to the metal at around $1,950.

Sunil Kumar Dixit of SK Charting, a technical analyst, noted that the $1,950 an ounce mark was an important barrier to gold's rise. He predicted that if this level was surpassed, it could drive gold prices to a record-breaking high of $2,100 an ounce.

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