Gold price makes slight gains in the face of Middle East risks. The upcoming FED meeting is the prior event all market participants wait with anticipation. This week, the Federal Reserve officials will meet to discuss future steps within the country’s monetary policy. Possible interest rate cuts are in focus.
Spot gold made a slight rally to gain 0.5%. The price exceeded $2K to end up at the level of $2,029.10 per ounce. Gold futures gained 0.6% costing $2,029.50 per ounce.
On the one hand, the conflict in the Middle East may have escalated. On the other hand, gold remained within a very limited band. This indicates that interest rate decreases and the Fed's monetary policy remains the primary topic of market attention.
Following the extinguishment of a fire on a tanker assaulted by the Houthi group in Yemen the previous day, commodities trader Trafigura announced on Saturday that it was evaluating the security risks associated with additional voyages across the Red Sea.
So, gold remains a safe-haven asset during turbulent political and economic times.
The Fed is expected to make a dovish policy decision on Wednesday following its meeting in December. After the 2-day meeting, the markets largely anticipate that the US Federal Reserve will maintain current interest rates.
Friday's data revealed a modest price increase in the United States in December, which prevented annual inflation from rising beyond 3% for a third straight month and may enable the Federal Reserve to start lowering interest rates this year.
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