Gold is trading around $5,010, attempting to extend gains amidst geopolitical tensions and a hawkish Federal Reserve outlook. The metal is influenced by US-Iran relations, strong US economic data, and uncertainty surrounding Fed rate cuts. Investors are closely watching upcoming US GDP and PCE data for further direction.
- Gold edged higher around $5,010 per ounce.
- Tensions between the US and Iran are escalating, supporting safe-haven demand.
- Federal Reserve Governor Stephen Miran tempered expectations for rate cuts.
- US Initial Jobless Claims fell, indicating labor market resilience.
- FOMC minutes showed policymakers divided on rates, with some signaling possible hikes if inflation remains elevated.
- US data releases, especially GDP and PCE inflation figures, are crucial catalysts.
- The US economy is expected to have expanded by 3% in Q4.
- The core PCE Price Index is expected to rise by 2.9% in December.
- The Greenback is in a bullish consolidative phase, courtesy of the hawkish Minutes of the US Federal Reserve’s (Fed) January monetary policy meeting and a recent slew of upbeat economic data.
- Trump warned late Thursday that Iran must make a deal, or “bad things will happen,” with the threat of military strikes still hanging heavy over delicate nuclear negotiations, per BBC News.
The precious metal’s price is subject to competing forces. Safe-haven demand is being bolstered by geopolitical uncertainty. However, strong economic data in the US is strengthening the dollar and reducing expectations of interest rate cuts, which could weigh on the commodity’s price. The upcoming economic data releases will be key in determining the short-term direction for the asset.