Gold prices are on the rise in the wake of escalating tension in the Middle East, with the price hitting $2,025 during the early Asian session on Monday. This marks the end of a two-week losing streak for the precious metal, as investors seek out safe-haven assets in light of geopolitical unrest. The Federal Open Market Committee (FOMC) meeting on Wednesday will be closely watched by traders, with expectations that interest rates will remain steady at 5.25–5.50%.
The latest data from the Commerce Department shows that the US Core PCE gauge, which excludes volatile food and energy prices, rose 2.9% annually in December, marking a slowdown from the 3.2% rate seen in November. This could potentially influence the Federal Reserve’s decision-making at their January meeting, with traders looking for cues from Fed Chairman Jerome Powell regarding the possibility of a rate cut in March.
The recent drone attack on US forces stationed in northeastern Jordan near the Syrian border has added to the geopolitical tensions in the region. This development could further boost the appeal of safe-haven assets like gold.
Looking ahead, the FOMC meeting and the Bank of England (BoE) interest rate decision on Thursday will likely provide a clearer direction for gold prices in the near term. These events, combined with ongoing geopolitical developments, will continue to influence the trajectory of the precious metal.
