On Friday (Jan. 14), international gold prices strengthened again and are expected to rise nearly 1.7% since the week of November 12, as the dollar index weakens. Traders waited for more economic data to clarify the Fed's timetable for tightening monetary policy.
Spot gold rose 0.24% to $1826.92 an ounce, COMEX gold rose 0.29% to $1826.6 an ounce, and the dollar index fell 0.16% to 94.730.
Kunal Shah, head of research at Nirmal Bang Commodities, said: "the weak dollar is supporting gold prices, which are likely to continue to rise today." Shah also said that with the resurgence of novel coronavirus cases, the prospect of central banks tightening monetary policy in major economies is facing uncertainty, which has also helped gold.
The dollar index hit a low of 94.626 since November 10 and is on track to record its biggest weekly decline of more than 1 per cent since early May last year, making dollar-denominated gold cheaper against holders of non-dollar currencies.
After December's inflation data were in line with expectations, investors expected the Fed not to raise interest rates too aggressively, and gold has been higher this week. They are waiting for U. S. economic data, including retail sales and industrial production, to be released later today.
Fed governor Brainard (Lael Brainard) told Congress that efforts to reduce inflation are the Fed's "top priority." She strongly advocated last year to ensure that the Fed does not scale back its stimulus measures prematurely to promote a strong recovery in the labour market.
Brainard made the comments at a confirmation hearing before the Senate Banking Committee (Senate Banking Committee) on Thursday, in the latest sign of the Fed's firm shift to fight inflation. Fed officials have hinted in recent days that they may raise interest rates at their meeting in mid-March.
Brainard reminds people of the rapid decline in unemployment. The inflation rate is so high that wage earners across the country are worried about the purchasing power of their wages, she said. "the focus of our monetary policy is to bring inflation down to 2 per cent while maintaining an all-inclusive recovery."
"inflation will slow in 2022 as the supply chain reopens and the prices of goods such as cars and energy fall as supply catches up with demand," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. However, due to rising labour costs and investment prices, inflation in many other goods and services will continue to be higher in 2022 than before the pandemic, and housing prices will continue to support high inflation in 2022. "
