Gold prices rose slightly on Tuesday, with spot gold closing up 0.19% at $2,036.81 per ounce. The settlement price of COMEX April gold futures closed up 0.31% at $2,050.9 per ounce, and the settlement price of COMEX March silver futures closed down 0.11% at $23.225 per ounce.
Market analysts are predicting that gold prices may continue to rise, despite the volatility in the market. They anticipate that the Federal Reserve will begin cutting interest rates in the near future, which would further support increases in gold prices.
The analysis comes as the Federal Reserve gears up for a decision on interest rates and other monetary policy decisions. According to the latest data from CME’s “Fed Watch,” the probability that the Federal Reserve will keep interest rates unchanged in February is 97.9%, while the probability of cutting interest rates by 25 basis points is 2.1%. Analysts expect the Federal Reserve to cut interest rates significantly this year.
Ricardo Evangelista, senior analyst at ActivTrades, emphasized that the Federal Reserve’s monetary policy stance is the most important driving factor for gold prices at this time. Even the safe-haven appeal of precious metals cannot withstand expected changes in the market around central bank monetary policy.
Michele Schneider, director of trading education and research at MarketGauge, anticipates some volatility and weakness in the first half of the year, despite being bullish on gold and silver in the new year. In an interview with Kitco News, Evangelista said he expects gold prices to hit a high of around $2,200 an ounce, with an annual average price of $2,100 an ounce.
The market’s attention now turns to Wednesday’s financial data and events, including the Federal Reserve’s interest rate decision and Chairman Powell’s press conference. Gold traders and investors are awaiting the outcome of these key events to determine the future trajectory of gold prices.