Gold futures continue to move higher Tuesday midday in Asia (Feb. 7) as markets await U.S. inflation data to be released Thursday (Asia time GMT+7). In addition, a big whale is said to be buying gold below $1,800 in a big way at the moment.
- The gold futures were up $14, or 0.8%, at $1,821.80 an ounce.
- Silver futures were up 60 cents, or 2.7%, at $23.076 per ounce.
- The platinum contract was down $4.2, or 0.4%, at $1,020 an ounce.
- Palladium fell $30.60, or 1.3 percent, at $2,260.10 an ounce.
Investors focused on the U.S. Labor Department, which will release the consumer price index for January on Thursday. Forecasts tend to inflation will reach a 40-year high. In addition, unexpectedly good labor market data was released last week, which may lead the Fed to take active measures against rising inflation.
Investors are therefore looking closely at the forecasts issued by numerous financial institutions. Some banks, such as the Bank of America, are even predicting up to 7 interest rate hikes.
Doubts remain, however, as the Fed is currently trying to keep the markets stable for as long as possible. In addition, many factors speak against too high an interest rate increase, such as the U.S. national debt, which has now risen to $30 trillion. If interest rates rise too high, this could lead to the first default in U.S. history. On the other hand, investors should pay less attention to what the Fed says and more attention to what the Fed does. Many statements have been made in the recent past, but nothing has really happened. Therefore, the real interest rates remain the most important factor for investors. As long as these are negative, it is still bullish for gold prices.
However, the situation in Ukraine must continue to be closely monitored. The US said that the Russian army has deployed 100,000 troops along the Ukrainian border and that an attack could occur at any moment. Meanwhile, French President Macron had a lengthy conversation with Russian President Putin. Putin is said to be open to compromise but maintains that Ukraine must not join NATO.
Furthermore, Putin sees some of Macron’s proposals as useful for finding a diplomatic solution. Macron, on the other hand, sees that there can still be a way for a peaceful solution to the conflict. He speaks of the need to “build a Europe with Russia.”
The only question is whether the U.S. sees it the same way since President Biden last announced that Nord Stream 2 will not be allowed if Russia invades Ukraine.
The Spot Market is Open
Tuesday, February 8, 2022