The yellow metal is marginally down in the London session today ahead of the U.S inflation data scheduled to be released today, which could offer further clues about the Federal Reserve’s timeline for monetary policy tightening.
Gold futures is down 0.16%, currently trading $1,833.60 an ounce, near Wednesday’s high of $1,835.60. The dollar index (DXY), which normally moves inversely to gold, is up 0.04%, while Benchmark 10-year U.S. Treasury yields were off their November 2019 highs.
Fed fund futures traders are already pricing in more than five 25 basis point interest rate hikes by December 2022, with a 27% chance that the first hike in March will be by 50 basis points. However, the Fed will have to move faster than it has in the past to remove accommodation and tame inflation that is well above target, but it may not be necessary to start hikes with a half-percentage point in March, according to Cleveland Fed Bank President Loretta Mester.
In other news, the Bank of England governor Andrew Bailey will also be speaking later in the day.Meanwhile, geopolitical tensions in Eastern Europe continue as Russian increased military capabilities along its border with Ukraine and Belarus, the U.S. Pentagon warned. Although Ukraine believes that the standoff between Western powers and Russia can be resolved via diplomacy, there are already grounds to impose sanctions on Russia, according to the country’s Foreign Minister Dmytro Kuleba.
In 2022, the yellow metal is up 1.76% Year-to-Date. It traded a high of approximately $1,850 an ounce on January 25th and it took a steep decline below the $1,800 trading zone. However, due to inflationary concerns and many legacy investor’s opinion that Gold is an effective edge against inflation, the metal quickly rallied back above the $1,800 trading zone to current trade these levels.
In other precious metals, Silver is up 0.11%, currently trading $22.36 an ounce. Platinum is down 0.47%, currently trading $1,032.45 an ounce. Palladium is down 0.07%, currently trading $2,283.52 an ounce.