February 13, 2025
New Delhi, India
Gold Prices(XAUUSD)
Gold prices (XAU/USD) extended gains for the second consecutive day on Thursday, supported by a weaker US Dollar (USD) and trade war concerns. The precious metal rebounded from the $2,864 mark, driven by a decline in US Treasury yields and safe-haven demand amid geopolitical tensions.
Key Drivers of the Rally
USD Weakness:
- The US Dollar remained near its weekly low, pressured by falling Treasury yields despite strong CPI data.
Trade War Fears:
- Concerns over tariffs imposed by former President Donald Trump sparked global trade war fears, increasing demand for safe-haven gold.
Inflation Concerns:
- US CPI for January rose 0.5% (highest since August 2023), with core inflation at 3.3% YoY, exceeding expectations.
Federal Reserve’s Hawkish Outlook
- Fed Chair Jerome Powell reiterated that the fight against inflation is ongoing, delaying rate cuts until inflation nears 2%.
- Atlanta Fed President noted that the labor market remains strong, but inflation needs close monitoring.
Market Expectations
- Traders now anticipate only one rate cut by year-end 2024, which could limit gold’s upside if yields rebound.
Upcoming Data
- The US Producer Price Index (PPI) and Initial Jobless Claims data, scheduled for Thursday, could influence the USD and gold prices further.
Market Reaction
As of Thursday morning, gold prices continue to hold firm, with investors closely monitoring US economic signals and global trade developments.
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