Economy Update – Baghdad
Gold prices demonstrated stability in early trading on Tuesday as investors await the outcome of the Federal Reserve’s Monetary Policy meeting, assessing potential impacts from President Donald Trump’s economic policies.
As of 0230 GMT, gold was trading at $2,738.90 per ounce. The price of the yellow metal had declined by more than one percent on Monday, triggered by a downturn in the broader market following a low-cost artificial intelligence model emerging from China.
US gold futures saw a slight increase of 0.2 percent, reaching $2,743.10 according to market data.
Market expectations indicate that the Federal Reserve is likely to maintain current interest rates during their meeting on Wednesday. Nevertheless, President Trump has expressed a desire for the central bank to consider a reduction in borrowing costs following his statements from last week.
If the Federal Reserve decides to keep interest rates unchanged, it will mark the first pause since the rate hikes initiated last September.
Tim Water, Chief Market Analyst at K.C, commented, “If Federal Reserve Chairman Jerome Powell hints at a potential interest rate cut in the coming months, it could pressure treasury bond returns and provide support for gold.” He noted that a target price of $2,800 per ounce is plausible for gold in the near term.
Gold, which does not generate yields, typically attracts investment when interest rates are low.
Additionally, data released on Monday indicated that China’s net gold imports via Hong Kong plummeted by 84 percent in December compared to the previous month, reaching the lowest level since April 2022.
In other precious metals, silver prices decreased by 0.4 percent to $30.07 per ounce. Palladium and platinum also fell by 0.4 percent, settling at $957 and $943.35, respectively.
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