Gold gains as Middle East tensions lift safe-haven appeal
GOLD prices rose on Monday (Jan 29) as escalations in the Middle East triggered safe-haven buying, while traders awaited United States Federal Reserve’s chair Jerome Powell’s remarks at the end of its two-day policy meet this week for interest rate outlook.
Spot gold was up 0.3 per cent at US$2,023.59 per ounce by 0139 GMT.
US gold futures rose 0.3 per cent to US$2,022.90.
Three US service members were killed and dozens may be wounded after an unmanned aerial drone attack on US forces stationed in northeastern Jordan near the Syrian border.
US prices rose moderately in December, keeping the annual increase in inflation below 3 per cent for a third straight month, which could allow the Federal Reserve to start cutting interest rates this year.
Another set of data last week showed the US economy grew faster than expected in the fourth quarter as inflationary pressures subsided amid strong consumer spending, indicating that the economy kicked off 2024 on a strong note.
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On the physical side, China’s gold premiums climbed last week as additional stimulus measures aided sentiment, days before Chinese New Year celebrations begin.
Comex gold speculators cut their net long position by 24,019 contracts to 76,615 in the week ended Jan 23, data showed on Friday.
Markets widely expect the US Fed to stand pat on rates at its policy meeting on Jan 30 to 31, but attention will largely be on comments from Powell.
Traders are betting on six quarter-point rate cuts for 2024 in the US, up from five cuts a week ago, according to LSEG’s interest rate probability app IRPR.
Lower interest rates decrease the opportunity cost of holding bullion.
Spot silver rose 0.5 per cent to US$22.91 per ounce, platinum fell 0.2 per cent US$911.09, and palladium also edged 0.2 per cent lower to US$953.85. REUTERS
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