Gold prices are currently at $2,627 an ounce today, up slightly from $2,625 at the beginning of last week and up significantly from Friday's lower close at $2,562.
Last week, the PPI (Producer Price Index) report was more inflationary than the previous few months. Fed Chair Jerome Powell amplified concerns about the future of interest rate cuts after he told reporters that the Federal Reserve does not need to be "in a hurry" to further lower rates. In reaction to the inflationary report and Powell's comments, the chances of no interest rate cuts from the upcoming FOMC meeting are slightly higher, currently at 37.9 percent, according to CME FedWatch.
Today's gold price shows resilience, as a hawkish stance from the Federal Reserve to lower interest rates further would generally create downward pressure on the precious metal. This week, escalating geopolitical factors are increasing demand for gold.
Over the weekend, President Biden authorized Ukraine to strike Russia using U.S. long-range missiles. "It is obvious that the outgoing administration in Washington intends to take steps to continue adding fuel to the fire and continue to provoke tension around this conflict," Kremlin Spokesperson Dmitry Peskov said earlier today, according to Reuters.
President Biden's decision to escalate the war will allow Ukraine to attack further inside Russia and comes as Russian President Putin positions North Korean troops along the northern border with Ukraine. This significant geopolitical event's uncertainty will likely add to gold demand this week.
As we consider President Biden's current moves and what it means for gold, we also took a deep dive into how we anticipate Donald J. Trump's impending presidency will impact the precious metals market. Catch a replay of last week's Bureau Briefings webinar to get the inside scoop!
Potential Market Moving Events for the Week:
Monday - Friday: 9 Speeches by Federal Reserve Leadership
Tuesday: Housing Starts, Building Permits
Thursday: Existing Home Sales, Initial Jobless Claims
Many investors turn to precious metals like gold and silver to hedge against uncertain economic times, inflation, and global wars. Precious metals have historically held their value during stock market volatility, providing a reliable and reassuring investment option during turbulent times.
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byUnited States Gold Bureau