Gold prices surged to their highest level in over a month on Thursday, January 16, following data that showed U.S. core inflation increased less than anticipated in December. This fueled speculation that the Federal Reserve might reduce interest rates further to support economic growth.
As of 0051 GMT, spot gold was flat at $2,695.84 per ounce after reaching its highest price since December 12 earlier in the session. U.S. gold futures rose by 0.2%, trading at $2,723.80 per ounce.
The rally in gold was supported by a decline in U.S. Treasury yields and a slight recovery in the U.S. dollar, which pared losses against major currencies. Following the latest consumer price index (CPI) data, market expectations for additional Fed rate cuts this year grew stronger, with some betting on at least a 25-basis-point cut at the Federal Reserve’s meeting in June.
The Federal Reserve is anticipated to keep its benchmark interest rate steady at 4.25% to 4.5% during its next policy meeting on January 28–29.
However, concerns persist regarding potential tariffs from the incoming Trump administration, which could contribute to rising inflation. Central bank officials noted that while inflation in the U.S. is continuing to ease, there is considerable uncertainty as they await the first signals from the new administration’s policies.
On the geopolitical front, a ceasefire agreement was reached between Hamas and Israel for the Gaza Strip, which was expected to take effect on Sunday. The deal includes the release of hostages held by Hamas during the 15 months of conflict, which devastated the Palestinian enclave and heightened tensions across the Middle East.
Meanwhile, other precious metals showed mixed movements. Spot silver fell by 0.3% to $30.57 per ounce, while palladium remained steady at $961.45. Platinum rose by 0.2%, trading at $940.45.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Gold Rates Skyrocket in Chennai on Diwali, 24K Gold Exceeds Rs. 81,000 Per 10 Grams
- Gold and Silver Prices Rise Across India on January 13, 2025
