The price of gold increased to over $2,030 per ounce last Friday. This rise occurred because the US dollar was weak at the time. Also, the increasing conflict in the Middle East made people buy more gold as a safe investment.
In Yemen, the United States and its allies carried out several attacks against the Houthi group. This group has been causing disruptions in trade in the Red Sea.
Despite the recent increase in the price of gold, experts expect it to decrease for the second consecutive week. This expectation comes as investors are less hopeful about the US Federal Reserve cutting interest rates soon.
The latest data showed an increase in US consumer prices. Over the past year, these prices rose by 3.4%. In December alone, they increased by 0.3%. These rises were higher than what experts had predicted. They had expected a 3.2% increase over the year and a 0.2% increase for December.
Loretta Mester, the President of the Cleveland Federal Reserve, commented on these figures. She said that the recent Consumer Price Index (CPI) numbers suggest that it is too soon to reduce interest rates. Thomas Barkin, the President of the Richmond Federal Reserve, also spoke about the data. He said that these figures do not give a clear indication of future inflation trends.
However, financial markets still believe there is a significant chance that the Federal Reserve will lower interest rates in March. They estimate this chance to be around 70%. This estimate is lower than the nearly 90% chance they previously thought.