Gold prices rise amid renewed investor hopes for monetary easing

Gold prices gained ground today, Jan. 15, reflecting its growing safe-haven appeal amid geopolitical tensions in the Middle East. This is besides the increasing market expectations about the Federal Reserve Bank's possible interest rate cut.

Bullion for February delivery gained 0.33% to stand at $2,058.30 per ounce at 10:30 am Makkah time, with spot prices also up 0.21% to $2,053.30 an ounce.

Silver futures for March delivery, likewise, rose by 0.41% to $23.43 per ounce, while platinum spot prices increased by 0.42% to $915.48 an ounce.

Similarly, platinum spot prices gained 0.37% to $951.45 per ounce, while silver futures for March delivery remained flat at $23.35 an ounce.

The market's likelihood of the Fed reducing interest rates by 25 basis points (bps) at the next March meeting increased to 70%, after reaching 62.6% on Jan. 8, according to the CME FedWatch Tool.

This followed last week’s official data that showed a decline in the Producer Price Index by 0.1% in December 2023 on a monthly basis.

According to estimates by the London Stock Exchange Group, investors forecast the US central bank to cut interest rates by 166 bps during the current year, compared to last week’s estimates of a 150-bps reduction, with a 79% probability of making the first cut by next March.