Gold prices flat as US dollar gains ground

Gold bars

Gold prices held ground today, Jan. 13, as the US dollar index rose following the release of labor market readings last week, which underpinned the possibility of the Federal Reserve slowing the pace of monetary easing.

February gold remained flat at $2,713.40 an ounce at 10:37 am Makkah time. Meanwhile, spot prices fell slightly by about 0.11% to $2,686.31 per ounce.

Elsewhere, March silver futures shed 0.35% to trade at $31.20 an ounce, with platinum spot prices also down 0.29% to $963.04 per ounce.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, climbed by 0.28% to 109.96 points.

This came after the Labor Department’s data released last Friday showed that the US economy added more jobs than expected in December 2024, reinforcing the continued momentum of the US labor market.

Accordingly, the chances that the Fed would keep interest rates steady at its January meeting soared to 97% from 78% a month ago, according to the CME FedWatch Tool estimates.

In the quarterly outlook report issued after the monetary policy meeting in December 2024, members of the Federal Open Market Committee (FOMC) indicated that they expect the pace of interest rate cuts to slow through 2025.

During the meeting, they expressed their concerns about the rise in inflationary pressures resulting from tightening trade policies during the term of President-elect Donald Trump, although they did not explicitly mention it.

Investors are awaiting the release of US producer price inflation data tomorrow. This is a day before the release of its counterpart for consumer prices, which are poised to accelerate to 2.9% on an annual basis in December 2024, from 2.7% in the previous month.