Please note ThinkMarkets does not provide CFD services to residents of the US.

Please note ThinkMarkets does not provide CFD services to residents of the US.

Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Partnership
 
Affiliate Programme

Grow your business and get rewarded. Find out more about our Affiliate Programme today.

Learn more
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn more
Proprietary Trading

Partner with us to build your own prop trading business. Enquire with our account managers today.

Learn more
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn more
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn more
Refer a friend

Receive $50 for you and your friend when you convert them into an active trader of ThinkMarkets.

Learn more
Partnership

Plug into the next-gen platforms and the trades your clients want.

Partner Portal
About ThinkMarkets
 
Sponsorships

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

Gold soars on slowing US inflation

Agnes Lovasz Agnes Lovasz 13/01/2023
Gold soars on slowing US inflation Gold soars on slowing US inflation
Gold soars on slowing US inflation Agnes Lovasz

US dollar falls on Fed rate outlook, supporting the gold price


Gold prices rose to an eight-month high this week on speculation the US Federal Reserve will further slow the pace of rate hikes after consumer prices fell for the first time in more than two years.

The spot gold price was at USD 1,905.29 an ounce at 10:30 GMT on Friday, 13 January, from 1,865,71/oz a week earlier, putting it on course for a 2.1% weekly gain. Gold futures were at USD 1,907.40/oz on Friday morning in London, a 2% weekly increase. 

A sustained move above the psychologically important USD 1,900-mark would open the way for further gold price advances, according to technical analysts. 

The latest report from the Bureau of Labor Statistics on US inflation, published 12 January, showed that consumer prices fell 0.1% in December from the previous month, after rising 0.1% in November. This was the first drop in prices since May 2020. The annual inflation rate fell to 6.5%, the lowest level since October 2021, from 7.1% in the previous month, according to the report. 

The US inflation rate has eased from a peak of 9.1% reached June, which was the highest since 1982.

Traders increased their bets for a 25-basis-point rate hike at the Fed’s 1 February meeting after the inflation data. Futures pricing now predicts a 93% probability of a quarter-point increase, according to the CME Group’s FedWatch Tool, up from a 57% chance of that move a month ago.

To combat inflation, the Fed raised rates seven times in 2022 to between 4.25% and 4.50%, from a 0% to 0.25% range at the start of the year.

The Fed slowed the pace of its rate increases to 50 basis points in December, after four, back-to-back 75-basis-point steps. The steep increases eroded the safe-haven appeal of holding gold, which pays no interest, in comparison with the US dollar and US Treasury notes. 

"In my view, hikes of 25 basis points will be appropriate going forward," Philadelphia Fed president Patrick Harker, a voting member of the rate-setting Federal Open Market Committee (FOMC), said in a speech on 12 January.  “The days of us raising them 75 basis points at a time have surely passed.”

As the inflation data made a further slowdown in the Fed’s tightening campaign more likely, the US dollar was suffering. A weaker US dollar makes gold contracts, priced in the US currency, more attractive to buy for the holders of other currencies.

The greenback was trading near a seven-month low and was on course for a weekly loss, based on the US dollar index (DXY), which tracks its value against six of its major counterparts.

The DXY was at 102.42 on Friday morning, 1.4% lower than last week’s close.

Will gold extend its gains in your view? Trade gold CFDs on ThinkTrader, our award-winning platform. Open an account today.

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top