Gold prices moved higher on Tuesday. The metal climbed above $5,070 per ounce. This level is close to a 2 week high. The rise came after fresh US economic data pointed toward slower growth. Investors now expect the Federal Reserve to lean toward easier policy later this year.
The latest numbers showed clear signs of cooling demand. This shift gave gold fresh support during the session.
Why gold price is rising above $5,070 today
Gold is moving up because the US economy is showing signs of slowing. December retail sales failed to grow as expected. The GDP control group slipped by 0.1%. Job openings fell to their lowest level since 2020. Private payroll growth also came in below estimates.
Together, these indicators suggest weaker demand and easing inflation pressure. This has pushed traders to lower their interest rate expectations. When rate cut hopes rise, gold usually benefits. Since gold does not offer yield, lower rates make it more attractive.
This change in outlook helped gold break above the $5,070 mark.
Federal Reserve rate outlook boosting gold prices
Markets are now more confident that the Federal Reserve could ease policy later this year. Softer economic data has strengthened this belief. As rate expectations move lower, the US dollar tends to soften. This supports gold prices further.
Non yielding assets like gold perform well when borrowing costs are expected to fall. This is why gold has found a stronger base in recent sessions.
Central bank buying and geopolitical risks supporting gold
Long term support for gold remains strong. China’s central bank continued buying gold for the fifteenth straight month in January. This steady official sector demand adds stability to prices.
Geopolitical risks are also playing a role. Tensions between the US and Iran have not fully eased. Despite some diplomatic signals, uncertainty remains in the region. This keeps safe haven demand alive.
With economic uncertainty, central bank buying, and global risks in play, gold’s downside appears limited for now.
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