Gold shines as dollar declines amid anticipation of central bank decisions

Gold prices saw an increase on Tuesday as the US dollar weakened, with investors anticipating interest rate decisions from various central banks and key economic data from the United States later in the week.

In spot transactions, gold rose by 0.5 percent to $2,030.64 per ounce by 0545 GMT, and US gold futures also saw a 0.5 percent increase to $2,031.90.

The decline in the dollar index by 0.2 percent made gold more attractive to holders of other currencies.

Tim Waterer, Chief Market Analyst at KCM Trade, noted that gold is expected to experience fluctuations until there are indications of when the Federal Reserve might make the initial decision to reduce interest rates.

Last week, US central bank officials mentioned that more inflation data is needed before any decision to lower interest rates is made. Lowering interest rates reduces the opportunity cost of holding non-yielding bullion.

Investors are eagerly awaiting the release of the US Purchasing Managers’ Index data on Wednesday, fourth-quarter GDP estimates on Thursday, and personal consumption expenditures data on Friday. The US Federal Reserve is scheduled to hold its next meeting on January 30 and 31.

In addition to gold, other precious metals also saw positive movements, with silver rising by 1.1 percent to $22.33 per ounce, platinum increasing by 1.1 percent to $902.36, and palladium rising by 0.9 percent to $944.47.