Gold prices drop as US inflation data looms

Gold bars

Gold prices plummeted today, Feb. 12, after a record run since the beginning of this week due to the escalation of global trade woes, but lost momentum after statements by Federal Reserve Chairman Jerome Powell reinforced forecasts of a slower pace of US monetary easing this year.

April gold futures plunged by 0.51%, or $15.1, to trade at $2,917.50 per ounce at 11:07 am Makkah time, after finishing unchanged during yesterday’s trading, and following a record close in Monday's session.

Spot prices also shed 0.19% to stand at $2,892.79 per ounce after touching a fresh record peak of $2,942.70 during Tuesday's trading.

Elsewhere, March silver futures fell slightly by 0.11% to $32.28 an ounce, while platinum spot prices climbed by 0.18% to $990.89 an ounce.

Federal Reserve Chairman Jerome Powell said in testimony before Congress yesterday that the US economy is in good shape, and monetary policymakers are in no hurry to continue cutting interest rates, but the bank is ready to take such measures if inflation declines or the labor market is negatively affected.

This came after members of the Federal Reserve Committee stated in their quarterly outlook report issued last December that current indicators suggest a pullback in the pace of monetary easing in 2025.

The positive momentum for gold at the beginning of the week was due to investors’ desire to own safe assets after the risks of a global trade war escalated due to the protectionist policies of US President Donald Trump.

The move has led to more investors to move their bullion held by the Bank of England to the New York Stock Exchange recently, to capitalize on the price variation that reached an unprecedented level of nearly $5 per ounce, besides fears that Trump will impose tariffs on the UK.

The World Gold Council reported that global gold exchange-traded funds received net inflows exceeding $3 billion in January. The average volume of trading in the yellow metal in global markets recorded $264 billion per day, an increase of 20% from last month’s average.

Investors are awaiting today the reading of annual consumer price inflation in the US, amid expectations that it will stabilize at 2.9% in January.