Gold is just 1% away from its all-time high of Rs 80000, after a modest core inflation reading this week that boosted bets for a more dovish Federal Reserve policy.
Bullion prices rebound on rising inflation
Gold rises as Treasury yields fall due to better-than-expected US core inflation. In contrast to last week’s projection of a 25 basis point rate cut, traders now predict the Fed may lower rates by 40 basis points by the end of 2025.
Bullion prices take a hit as Israel-Hamas ceasefire deal on final stages
The positive developments that a ceasefire in the Israel-Hamas battle in Gaza is getting closer and that talks to end the conflict are nearing completion are causing a decline in the price of precious metals.
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Gold continues winning streak on safe-haven demand
Gold continued its winning streak due to safe-haven demand sparked by worries about Donald Trump’s proposed policies, while the UK faced a budget crisis.
Strong investment and Industrial demand support precious metals
In response to Fed minutes that suggested a possible delay in the rate-easing cycle, gold is trading strongly. Furthermore, investors are turning to precious metals for stability due to increased market volatility from elevated geopolitical tensions.
Strong Central bank buying supports gold markets
In November 2024, the central bank increased its gold reserves by 53 tons, indicating continued strong purchases. The Reserve Bank of India resumed its 2024 purchasing spree, increasing 8 tons of its gold reserves in November.
Precious Metals forming a base for next-up leg
Precious metals are trying to form a base and rebound as US data showed a slowing economy and a “timid” reacceleration in inflation. This week is critical for gold traders, who will closely monitor key economic data.
Dollar strength putting pressure on precious metals
The main theme of the first week of 2025 was the strength of the US dollar. The strength of the Greenback may limit the upside potential of dollar-denominated gold, as a higher USD makes gold more expensive for buyers using other currencies.
Precious Metals heads north amid rising geopolitical uncertainty
US President Joe Biden reportedly discussed contingency plans for striking Iran’s nuclear facilities if Tehran made significant progress toward developing a nuclear bomb before Donald Trump’s inauguration on January 20.