The price of gold is able to continue to rise late in the evening in Asia. At 10:42 PM (GMT+7), gold prices are up 0.63%, or $11.70, to $1,871.70 per ounce.
The Silver price could also continue to rise further, with 1.27% to $23.97 per ounce. For the silver price should keep an eye on the key mark of $25.00.
The war fears in Ukraine are still the key factor for the rising gold prices at the moment. As recently as Sunday, White House National Security Advisor Jake Sullivan said that a Russian invasion could start at any time. In addition, President Biden had urged U.S. citizens in Ukraine to leave the country. This of course keeps the pulse up.
Meanwhile, the finance ministers of the G7 countries have issued another warning to Russia that an invasion of Ukraine will bring harsh economic sanctions. This includes that Russian banks could be banned from the SWIFT system.
However, the main reason for the current price increases was the unexpected rise in the inflation rate. The CPI rose another 7.5% YoY in January, further reminiscent of levels last seen over 40 years ago.
Therefore, the Fed will hold a special meeting today to discuss the further course of action. There is already speculation that the Fed should think about raising interest rates earlier than March. However, this could catch market participants on the wrong foot, as they possibly expect an interest rate hike in mid-March.
A rise in interest rates could bring gold prices back a bit, but no high rate hikes are expected. This will mean that real interest rates will remain negative, which is the main bullish factor for gold.