Nov 15, 2023

Gold prices rose on Tuesday despite the cooling in inflation. 

xauusd-chart

XAUUSD – Daily Chart

Gold rose to $1,962 on Tuesday and will look to regain the $2,000 level seen recently. 

Investors often focus on using gold as an inflation hedge. Still, the Federal Reserve raising rates means less demand for gold, which does not yield interest. 

That led to the price lows seen in October, but the situation in the Middle East led to a price surge. If gold can hold onto the $2,000 level, it may push for record highs if further tension in the Middle East occurs. 

For now, the talk is of a ceasefire in Ukraine, and there has been no wider conflict with Israel. 

A 1.42% drop helped gold in the price of the dollar index after inflation cooled to 3.2% annually. Although that is still above the Federal Reserve’s 2% target, the Fed will likely pause with 10-year government debt above 4%. 

Bullion prices have been supported by large central bank buying, and this year’s purchases are on pace to top last year’s record. In 2022, for example, central banks such as China, India, and Russia added a massive 1,136 tonnes of gold worth around $70 billion to their stockpiles, the World Gold Council (WGC) said. This was a record going back to 1950.

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