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Gold Prices Climb Amid Policy Uncertainty and Inflation Concerns

14 Jan 2025 8:42 am
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MUMBAI, 14 Jan (Commoditiescontrol): Gold prices edged higher on Tuesday as uncertainty surrounding the incoming Trump administration's economic policies and cautious positioning ahead of key U.S. data bolstered demand for the safe-haven asset. Investors are closely watching upcoming reports to gauge the Federal Reserve's future monetary policy stance.

Spot gold rose 0.3% to $2,671.13 per ounce, while U.S. gold futures gained 0.4% to $2,688.40. This rebound follows a nearly 1% drop in the previous session, driven by a strengthening U.S. dollar after robust jobs data.

The strong U.S. jobs report last week reinforced the Federal Reserve's cautious approach toward further interest rate cuts. Concerns about potential inflationary pressures, fueled by tariffs proposed by President-elect Donald Trump, added to market uncertainty. While gold is traditionally seen as a hedge against inflation, higher interest rates reduce its attractiveness as a non-yielding asset.

Investors are now awaiting crucial U.S. economic indicators, including the Consumer Price Index (CPI) data on Wednesday and the Producer Price Index (PPI) report later today, for further insights into inflation trends and the Fed’s policy path. Additionally, several Federal Reserve officials are scheduled to deliver speeches this week, which could provide further direction.

Data from the Commodity Futures Trading Commission showed that COMEX gold speculators increased their net long positions by 12,116 contracts to 194,499 in the week ending January 7. However, the SPDR Gold Trust, the largest gold-backed exchange-traded fund, reported a 0.26% decline in its holdings to 874.52 tonnes as of Monday, down from 876.82 tonnes on Friday.

In other markets, spot silver gained 0.2% to $29.67 per ounce, and palladium rose 0.3% to $941.26 per ounce. Platinum, however, edged lower by 0.1%, trading at $952.78 per ounce.

The interplay between inflation concerns, monetary policy expectations, and global economic uncertainty continues to influence the precious metals market. As investors digest upcoming data and policy developments, gold's appeal as a safe haven is likely to remain strong in the near term.

(By Commoditiescontrol Bureau; +91 98201 30172)


       
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