Gold prices update highs due to weak dollar
2023.01.09 03:28
Gold prices update highs due to weak dollar
Budrigannews.com – After signs of a cooling jobs market raised expectations for a softer U.S. inflation reading this week and an eventual change in the hawkish rhetoric of the Federal Reserve, gold prices rose on Monday, maintaining their seven-month high.
After data from the Labor Department showed that growth in December was at its slowest rate in a year, prices of the yellow metal shot up on Friday. Both wage growth and readings for the previous two months were revised lower.
The reading eased concerns that an overheated jobs market in the United States would prevent inflation from falling further this year. Additionally, it raised expectations that the Federal Reserve would ease its hawkish stance sooner rather than anticipated, easing pressure on gold and other assets that do not yield money.
by 19:35 ET (00:35 GMT), it had increased by 0.1% to $1,868.61 per ounce and by 0.2% to $1,873.15 per ounce. After gaining nearly 2% on Friday, both instruments were trading at their highest level since early June.
After reversing most of the gains from the payrolls data last week, the also slid lower on Monday.
For additional clues regarding the direction of U.S. interest rates, focus now shifts to Thursday’s inflation data. In December, CPI inflation is expected to have fallen to a one-year low, indicating that the Fed’s planned series of sharp interest rate increases in 2022 are working as intended.
The opportunity cost of holding non-yielding assets increased as a result of these rate hikes, which caused gold prices to plummet last year. However, there has been a resurgence in interest in the yellow metal over the past month, with safe haven demand also returning amid concerns of a possible recession in 2023.
The majority of traders are pricing in an only for the Fed to further slow its rate of interest rate increases. However, the central bank has stated that it may continue to raise interest rates.
On Monday, optimism regarding the reopening of China’s international borders sparked a sharp rise in the red metal, despite the fact that copper prices retreated slightly among industrial metals.
After a rally of 2.6% last week, the price of a pound fell 0.4 percent to $3.9588.
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This month, China eased further its anti-COVID measures, which markets hope will prompt a swift economic recovery in the world’s largest copper importer. As a result, prices of the red metal increased.
