The price of each ounce of gold has returned above the 5,000 USD mark, after the US announced a cooling inflation in January.
At the close of trading on February 13, global spot gold prices increased by 120 USD to 5,041 USD per ounce. This trend reversed from the previous session, where prices fell by 3% to the lowest in nearly a week.
The market rose in the last trading session of the week, thanks to falling US inflation, increasing expectations that the Federal Reserve (Fed) will cut interest rates. For the week as a whole, gold prices increased by 1.2%.
Spot silver prices rose nearly 3% to 77.3 USD per ounce. However, for the week as a whole, the price of this metal slightly decreased, due to a nearly 11% drop in the previous session.
"Gold, and especially silver, rose in price due to US inflation data for January. This report dispelled earlier concerns about price outlook after US labor data," said Tai Wong - an independent precious metals analyst in the US.
The Consumer Price Index (CPI) in the US rose by 2.4% in January compared to the same period last year. This rate is lower than the previous month (2.7%), according to the US Department of Labor.
Investors currently expect the Fed to cut interest rates by a total of 63 basis points (0.63%) this year. The first expected cut is in July, according to data firm LSEG. Gold prices tend to rise in a low-interest environment.
In the physical market, gold demand in China remains stable ahead of the Lunar New Year. Meanwhile, in India, prices have fallen.
ANZ Bank raised its gold price forecast for Q2 to 5,800 USD per ounce, from 5,400 USD previously, due to safe-haven demand. Meanwhile, silver prices may not rise as strongly as before. Although still supported by strong investment demand, industrial usage demand has decreased as buyers hesitate at high prices.
Platinum prices closed on February 13 up 3.8% to 2,075 USD per ounce. Palladium rose by 3.6%, closing at 1,674 USD. Both recorded a week of depreciation.
