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Highlights
Gold Prices Rise Slightly
- Spot Gold: Up 0.4% to $2,627.55 per ounce.
- Gold Futures (February): Increased 0.1% to $2,643.86 per ounce as of early Thursday.
A slightly weaker US dollar supported gold prices in thin post-holiday trading, though gains were capped by caution stemming from the Federal Reserve’s hawkish stance.
Safe-Haven Demand Amid Middle East Tensions
Geopolitical risks in the Middle East further boosted demand for gold as a safe-haven asset:
- Hamas-Israel Conflict: Tensions escalated with mutual accusations over stalled ceasefire agreements, adding uncertainty to the region.
Impact of the US Dollar on Gold
- The Dollar Index weakened slightly but remains near a two-year high.
- A stronger dollar typically weighs on gold prices, as it makes the metal more expensive for non-dollar buyers.
- Fed’s Hawkish Policy: Indications of prolonged high-interest rates from the Fed have pressured gold recently, as higher rates raise the opportunity cost of holding non-yielding assets like gold.
Performance of Other Precious Metals
- Platinum Futures: Flat at $960.20 an ounce.
- Silver Futures: Muted at $30.273 an ounce.
Market Outlook
Gold’s near-term trajectory remains tied to:
- Geopolitical developments.
- Signals from the Federal Reserve regarding monetary policy.
- Fluctuations in the US dollar and Treasury yields.
Traders are likely to remain cautious in the holiday-shortened week, keeping trading volumes thin and price movements modest.
