Gold Prices Decline 0.82%: Robust Economic Growth Driven by December Demand


Gold prices fell -0.82%, settling at 61505, as robust demand in December fueled robust economic growth. Retail sales increased by 0.6% for the month, according to the United States Census Bureau, exceeding forecasts and pointing to strong consumer spending.

Nonetheless, a more realistic assessment of the prospective timing and magnitude of interest rate cuts in the year to come has been adopted by market participants in response to recent remarks made by a number of Federal Reserve officials.

Chairman Powell’s position was reaffirmed by Fed Governor Christopher Waller. Who emphasised that although rate cuts are anticipated in the upcoming year. The central bank is able to ease monetary policy gradually.

Rate reductions will only be taken into consideration when the Federal Reserve is certain that inflation is significantly returning to its target of 2%, as stated by New York Fed President John Williams.

The cautious stance of the central bank was indicated by Cleveland Fed President Loretta Mester’s suggestion that a rate cut in March might be premature.

Prior to considering rate cuts, other Fed officials, such as Chicago Fed President Austan Goolsbee and Richmond Fed President Tom Barkin. Emphasised the need for additional evidence and conviction that inflation will reach the Fed’s 2% target.

Technically, the market was showing signs of a long liquidation, as open interest dropped by 9.5% to 7467. The levels of 61280 provide support for gold, and a breach there might result in a test of 61050. Prices may move towards 62320 if there is a breakout from the likely resistance level of 61915.