Amber Warwick
Investing.com — Gold prices held tight on Monday as traders braced themselves in anticipation of this week’s Federal Reserve meeting.
The Fed is widely expected on Wednesday. However, the central bank’s stance on future rate hikes will be watched closely given that recent data paint a somewhat mixed picture for the US economy.
Inflation has moderated as expected in recent months, but remains above the Fed’s annual target of 2%. The U.S. job market and economic growth also weakened more than expected in the second half of 2022, giving the Fed more leeway to keep raising rates.
A hawkish signal from central banks could turn negative for non-yielding assets such as gold. The market is also awaiting his January reading later this week.
By 19:20 ET (00:20 GMT), it stabilized at around $1,928.64 per ounce before gaining 0.1% to $1,929.95 per ounce.
This week’s focus will also be on Q4 and Eurozone data, due Tuesday and Wednesday respectively. Significant signs of a slowdown in the region, especially in Germany, the economic powerhouse, could boost demand for safe haven gold.
The yellow metal benefited from growing global recession concerns this year. That’s as traders parted with the dollar in anticipation of a slowdown in rate hikes by the Federal Reserve.
But gold’s rise stalled at a nine-month high after data showed the U.S. economy grew better than expected in the fourth quarter, and despite high inflation and rising interest rates, the country is still It shows that you are maintaining your resilience.
This boosted the dollar, which remained bearish on Monday at levels close to nine-month lows.
Among industrial metals, copper prices rose slightly in anticipation of the Chinese market reopening after a week’s holiday.
It rose 0.1% to $4.2390 per pound last week after breaking a five-week winning streak.
A slew of Chinese economic data this week are also awaited for more clues about the world’s largest copper importer after recently easing most anti-COVID measures. The reopening of the Chinese economy is expected to boost global copper demand, which could lead to higher red metal prices.
Expectations of tighter copper supplies after miners also benefited prices MMG Ltd (HK:) has warned of possible production disruptions at its Peruvian mines due to civil unrest in the country.
