Breaking News
Investing Pro 0
💎 Reveal Undervalued Stocks Hiding in Any Market Get Started

Gold nears 9-month high and $1,950 test on softening U.S. inflation

Commodities Jan 13, 2023 03:15PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
XAU/USD
-0.54%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
Gold
-0.55%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
EUR/USD
-0.54%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/JPY
+0.08%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US10Y...
-0.48%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DXY
+0.44%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Barani Krishnan

Investing.com -- Gold neared a nine-month high on Friday, approaching the key $1,950-an-ounce resistance, as softening U.S. inflation and rate hike expectations boosted contrarian safe-haven trades.

Gold for February delivery on New York’s Comex settled at $1,921.70, up $22.90, or 1.2%, on the day. Its session high of $1,925.25 was the loftiest for a front-month contract in Comex gold since the April 25 peak of $1,935.50.

U.S. gold futures have risen 5% since 2023 began, extending their near 4% gain from December and 7% from November.

The spot price of gold, more closely followed than futures by some traders, was at $1,919.54 by 15:10 ET (20:10 GMT) — up $22.63, or 1.2%, on the day. Spot gold’s intraday peak was $1,921.97— also the highest since April 25.

Gold has rallied over the past three months as receding inflation drove bond yields and the dollar lower on expectations that the Federal Reserve will be a lot less aggressive with rate hikes this year versus 2022, and might even wrap its monetary tightening well before the end of 2023.

“Gold prices are rising as Wall Street grows confident that the Fed is almost done with raising rates,” said Ed Moya, analyst at online trading platform OANDA. “Non-interest bearing gold is loving the slide in bond yields and that could continue as earnings come in softer-than-expected.”

The yield on the benchmark 10-Year U.S. Treasury note was at 3.47% on Friday, versus the October peak of 4.34%. The Dollar Index, which pits the greenback against six competing major currencies that include the euro and yen, steadied at just above 102, after tumbling from September’s highs of above 107.

The University of Michigan's closely-watched survey of consumers said on Friday that year-ahead inflation expectations among Americans has fallen for a fourth straight month in January, dipping to 4.0% from 4.4% in December. It was the lowest reading for price pressures since April 2021, the survey said.

Officially, inflation, as indicated by the Consumer Price Index, or CPI, rose by 6.5% in the 12 months to December, the U.S. Labor Department said Thursday. It was the slowest annual advance for the CPI since October 2021.

The CPI hit a 40-year high in June when it grew at an annual rate of 9.1%, versus the Fed's inflation target of just 2% per annum. In a bid to control surging prices, the Fed added 425 basis points to interest rates since March via seven rate hikes. Prior to that, interest rates peaked at just 25 basis points, as the central bank slashed them to nearly zero after the global COVID-19 outbreak in 2020. The Fed, which executed four back-to-back jumbo rate hikes of 75 basis points from June through November, imposed a more modest 50-basis point increase in December.

For its next rate decision on Feb. 1, economists expect the central bank to announce an even smaller hike of 25 basis points.

The last time the Fed announced a 25 basis-point increase was in March 2022, at the start of its current rate hike cycle.

Moya, the analyst at OANDA, said if gold could “comfortably close above the $1,900 level, that could be a very bullish signal for the rest of the month”, adding that he expected "strong resistance at the $1,950 region" for the yellow metal.

The $1,950 resistance was flagged by Investing.com in a January 4 analysis, where technical chartist Sunil Kumar Dixit of SKCharting.com said it would be the key barrier for gold to get past in order to make a new record high above $2,100.

“Spot gold needs to stabilize at above $1,950,” said Dixit in that Investing.com analysis. “It might seem like a no-brainer — in order to get to a new record above $2,000, you’d need to cross $1,950.”

“But the reality is it is actually a structurally-important level for gold to consolidate and gain strength at, in order for it to make the next leap towards a record. It’s not just a natural progression. That stabilization at above $1,950 is key. And so far, that level appears to be a resistance.”

Gold nears 9-month high and $1,950 test on softening U.S. inflation
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
YASHU PREETHI
YASHU PREETHI Jan 14, 2023 8:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold Silver down side.. tell me Sir
Amreek Singh
Amreek Singh Jan 14, 2023 8:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
down
amjad ali
amjad ali Jan 14, 2023 5:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
sunil kumar dixt 99 percent wrote perfect artical very helpful me . sir i think gold take a correctoin near 1950
Shahzad Faisal
Shahzad Faisal Jan 14, 2023 7:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Aleays like your analysis Sir,
Barani Krishnan
Barani Krishnan Jan 14, 2023 7:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks, Shahzad. Much appreciated.
Stephen Fa
Stephen Fa Jan 13, 2023 1:39PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I also like Bitcoin in addition to physical gold.
Barani Krishnan
Barani Krishnan Jan 13, 2023 12:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ashish Mittal, read the story, not just the headline. Learn to read. LOL!
Barani Krishnan
Barani Krishnan Jan 13, 2023 12:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just putting thumbs down on my comment doesn't work, Ashish. You need to learn to READ!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email