Gold closes $7.2 higher on slower Fed rate hike expectations

Gold futures closed higher on Wednesday, January 25th, supported by a weak dollar and expectations that the US Federal Reserve (Fed) will slow down on raising interest rates at its upcoming meeting.

  • Gold futures rose $7.2, or 0.37%, to close at $1,942.60 per ounce, marking its fifth straight day of gains, the longest streak since August.
  • Silver futures also rose 19.2 cents, or 0.81%, to close at $23.941 per ounce.
  • Platinum futures fell $20.7, or 1.94%, to close at $1,046.1 per ounce.
  • Palladium futures fell $47.60, or 2.7%, to settle at $1,687.90 per ounce.

Analysts at City Index noted that gold futures closed positively due to expectations that the Fed will raise interest rates by only 0.25% at its meeting on January 31st and February 1st, after recent US Consumer Price Index (CPI) and Producer Price Index (PPI) data indicate that US inflation has risen above its peak.

Additionally, the market was also driven by the depreciation of the dollar, as the dollar index against a basket of six major currencies fell 0.27% to 101.6440 overnight, making gold contracts priced in dollars cheaper for investors holding other currencies.

Investors are also awaiting the release of US gross domestic product (GDP) figures for the fourth quarter of 2022 today, and the Personal Consumption Expenditure (PCE) Index tomorrow. The PCE index is the Fed’s main focus on inflation as it can detect changes in consumer behavior and covers a broader range of prices for goods and services than the Consumer Price Index (CPI).

The Spot Market is Open

Thursday, January 26, 2023

Metals
Updated at
USD
Bid/Ask
Ounce
Change

Low/High
Gold
11.25
1,946.90
1,947.90
+090
+0.05%
1,942.40
1,949.60
Silver
11.25
23.86
23.97
-0.03
-0.10%
23.78
24.06
Platinum
11.25
1,037.00
1,047.00
-1.00
-0.10%
1,035.00
1,051.00
Palladium
11.15
1,638.00
1,788.00
+14.00
+0.86%
1,620.00
1,789.00
Rhodium
06.00
11,000.00
13,000.00
0.00
0.00%
11,000.00
13,000.00

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