Gold Holds Above $5,000.. Silver Nears $82

SadaNews - Gold prices rose slightly while holding above the $5,000 per ounce level, after weak retail sales data in the United States bolstered expectations that the Federal Reserve would move to lower interest rates.

The precious metal increased by up to 0.6% after closing lower on Tuesday. Consumer spending unexpectedly stopped in December, setting the stage for the delayed and anticipated jobs report for January, which is scheduled to be released on Wednesday.

Gold had surged to a record high of over $5,595 per ounce in late January, driven by geopolitical turmoil, attacks on the independence of the Federal Reserve, and a shift by investors away from traditional assets such as currencies and sovereign bonds. However, a wave of excessive speculative buying pushed the increase to exaggerated levels before gold dropped by about 13% over two sessions.

Partial Recovery and Expectations for Resumption of Increase

Since then, the metal has reclaimed about half of those losses, trading this week near the $5,000 per ounce level. Several banks see the upward trend likely to resume, as the factors that supported the increase remain in place. BNP Paribas projected that gold could reach $6,000 by the end of the year, while both Deutsche Bank and Goldman Sachs also maintain positive forecasts.

Any further reduction in borrowing costs would be a supportive factor for gold, which does not yield returns and typically benefits from a low-interest-rate environment. U.S. President Donald Trump nominated Kevin Warsh to head the Federal Reserve, a proponent of further rate cuts.

In contrast, Federal Reserve Bank of Cleveland President Beth Hammack said on Tuesday that interest rates may remain unchanged for an extended period while officials assess incoming economic data.

Movements of Metals and the Dollar

Spot gold rose by 0.3% to $5,056.66 per ounce. Silver also climbed by 0.6% to $82.3066, while both platinum and palladium recorded slight increases.

Meanwhile, the Bloomberg Dollar Index remained stable with little change, having lost more than 1% in the previous three sessions.