Following a significant increase the day before, gold prices were around a six-month high on Wednesday as markets anticipated an interest rate increase from the Federal Reserve later in the day as well as their comments on lessening inflationary pressures. As evidence that price pressures in the nation have peaked and are expected to retreat, gold prices surged on Tuesday as statistics indicated that consumer price index (CPI) inflation in the United States decreased even more in November.
Gold futures were stable at $1,821.70 per ounce, while spot gold was unchanged at $1,809.90. On Tuesday, both assets increased by around 1.6%. According to data, U.S. CPI inflation decreased more than anticipated to 7.1% in November due to tighter monetary conditions, lower gasoline prices, and slower national economic development. Additionally, it was the year’s lowest reading on inflation. Now the focus is on the Fed’s annual meeting, which will end later today. Interest rates are anticipated to rise by 50 basis points from the central bank (bps).
But following the meeting, Fed Chair Jerome Powell will give a speech that the markets will be eagerly watching to determine if the central bank believes that inflation has decreased enough to start slowing its pace of interest rate increases. Metal markets were hit this year by a slew of abrupt interest rate increases by the Fed, which prioritized battling price pressures. Any indications of slower rate increases are expected to help markets in the near future.
Several other precious metals experienced significant rises on Tuesday. While silver gained 2.2%, platinum futures increased by 3.3%. Copper prices among industrial metals decreased on Wednesday due to the ongoing uncertainty surrounding demand in China, a significant importer. A pound of copper futures was trading at $3.8407, down 0.2%. However, the output of red metal may become more constrained in the near future due to factors such as public upheaval in Peru, the world’s No. 2 producer of copper.