Market comment on behalf of Ruben Ferreira – Head of Portuguese Operations at FlowCommunity
15th January 2025
Gold prices stabilised after a decline in the previous session. The precious metal benefitted from the retreat of the U.S. Dollar from its two-year peak and the pullback in U.S. Treasury yields from their highest levels in over a year.
Investors are closely monitoring upcoming economic indicators, particularly today’s producer price index (PPI) report and tomorrow’s consumer price index (CPI) data. These reports will provide crucial insights into the economy and the Federal Reserve’s policy direction for 2025. The recent robust labor market data has led markets to anticipate just one rate cut this year, with any signs of resurging inflation potentially prompting further cautious adjustments to Fed policy expectations, which could weigh on gold.
The broader outlook for gold remains optimistic, supported by several fundamental factors. Ongoing geopolitical uncertainties continue to enhance gold’s appeal as a safe-haven asset, while sustained central bank purchasing activities provide additional support to the precious metal’s value. However, potential policy developments from the Trump administration could pose some risks.