Gold Trading Cautiously Ahead of Key US Inflation Data Release

15 Jan 2025 , 10:11 AM

As investors remained cautious ahead of the U.S. consumer price inflation data, which could shed additional light on the Federal Reserve’s interest rate trajectory, gold prices were muted on Wednesday.

Spot gold fell 0.1% to $2,672.93 an ounce. At $2,689.60, U.S. gold futures increased by 0.3%.

In order to predict the Fed’s policy direction, investors now await the Consumer Price Index (CPI) release, which is scheduled for 1330 GMT. Future Fed easing could be further blocked by any positive surprise.

Gold continued to rise Tuesday as data revealed that the Producer Price Index (PPI) increased 3.3% annually in December, which marginally increased expectations that the Fed will continue to ease interest rates this year and caused the US dollar to decline.

A rate-cut halt at the Fed’s policy meeting later this month, however, has been completely priced in by traders.

Next week marks the start of President-elect Donald Trump’s second term, and analysts continue to focus on his plans, which they predict will increase inflation.

Although increased interest rates make it less attractive, bullion is used as a hedge against inflation.
The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings decreased by 0.23% from 874.52 tonnes on Monday to 872.52 tonnes on Tuesday.

Wang Tao, a technical analyst for Reuters, predicts that current gold prices could drop below $2,635 an ounce.

Palladium remained steady at $938.23, while spot silver fell 0.4% to $29.78 an ounce. Platinum went up 0.3 percent to $937.66.

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