Gold ends 1% lower as US dollar soars

Gold prices turned lower at settlement today, Jan. 16, with the US dollar and bond yields surging as investors awaited more data to build expectations about the future path of Federal Reserve policy.

Bullion for February delivery fell by approximately 1%, or $21.4, to finish at $2,030.20 per ounce, after touching $2,062.80 an ounce in early trading.

The US dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.95% at 103.37 points at 09:27 pm Makkah time.

In a speech today, Fed Governor Christopher Waller stressed that when the time comes to start lowering interest rates, they must be reduced “systematically and carefully”. He sees no reason to cut rates rapidly as happened in some previous cycles.

The CME FedWatch Tool showed that markets are pricing in a 97.4% chance that the US central bank will hold interest rates during this month’s meeting. Expectations for a 25-basis-point rate cut in March declined to 65.2% from 76.9% a day ago.