Gold prices rise ahead of key data that will determine its next path

Gold prices rose in early trading on Wednesday, in line with a decline in the US dollar index, as investors awaited a series of economic reports this week.

The increasing geopolitical tensions may limit the downward trend of gold, with the 2000 dollar level under surveillance as support in the short term.

The dollar index fell but remained close to its highest level in six weeks, which it recorded on Tuesday. The 10-year Treasury bond yield also fell, but remained above 4%.

In the broader financial markets, Asian stocks rose amid optimism that Chinese authorities will provide support to their stock markets, which have fallen to multi-year lows.

The US manufacturing purchasing managers’ index report, which is scheduled to be released on Wednesday, and the fourth-quarter GDP estimates, which are scheduled to be released on Thursday, as well as personal consumption expenditures data on Friday, will be essential in assessing the central bank’s next policy decision when it meets on January 31.

Gold and the dollar now

Gold futures rose 0.25% to $2,031 an ounce.

Meanwhile, spot gold rose by around 0.05% to $2,030 an ounce.

On the other hand, the dollar index fell by 0.3% to 103.11 points.

Other metals

Silver fell 0.3% to $22.38 an ounce in spot trading, platinum held steady at $900.36, and palladium fell 0.7% to $941.74.

Yen rises, Dollar holds steady amid Central Bank signals

The yen rose on Wednesday after investors increased their bets that the Bank of Japan will end its stimulus measures in the coming months, while the dollar held its gains against major currencies amid expectations that the Federal Reserve will not rush to cut interest rates.

The Japanese currency rose about 0.41% to 147.76 to the dollar in Tokyo trading hours as government bond yields jumped to the highest level in six weeks after Bank of Japan Governor Haruhiko Kuroda said on Tuesday that the chances of achieving the target inflation level are gradually increasing.

The yen received an additional boost from the decline in long-term US Treasury yields in Wednesday’s trading, which affect the yen’s exchange rate against the dollar, as some of the traders’ bets on the Fed’s move to cut interest rates have diminished.

Dollar retreats from its highest levels

The US dollar retreated from a six-week high in early European trading on Wednesday amid rising risk appetite, while the euro struggled to rise ahead of the European Central Bank’s policy meeting this week.

The dollar index, which tracks the US currency against a basket of six other currencies, fell 0.48% to 102.904, not far below its highest level since early December at 103.82, which was reached in the euro zone in the previous session.

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Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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