On January 14, following the overnight market where US core inflation cooled more than expected, spot gold in London surged before pulling back. COMEX February gold futures closed down 0.34%, while SHFE gold closed up 0.14%. After the release of US inflation data, precious metals initially rose. The Fed is highly likely to maintain the current interest rate level in January, while geopolitical developments remain the primary short-term trading focus, keeping gold's momentum strong.
US core inflation levels cooled more than anticipated. The overnight market saw the release of US December CPI data, which showed a year-on-year increase of 2.7%, matching both expectations and the previous value. Core CPI rose 2.6% year-on-year, unchanged from the prior reading but slightly below the expected 2.7%. Considering the employment and inflation data, the probability of the Fed maintaining rates unchanged in January remains high. Concurrently, the US President has continued to express that the Federal Reserve should cut interest rates. Yesterday, central banks from several countries issued a joint statement in support of Fed Chair Powell, collectively responding to the Trump administration's use of judicial means to pressure the central bank and threaten its independence. On the geopolitical front, the US government has advised its citizens to evacuate Iran as soon as possible. In market news, according to a notice released by the CME Group on January 12, the method for setting margins for gold, silver, platinum, and palladium contracts will be changed. The new method will calculate margins as a percentage of the contract's nominal value, replacing the previous fixed-amount system. The margin rate for some non-high-risk portfolio gold contracts will be adjusted to approximately 5% of the nominal value, while for silver it will be about 9%.
In summary, against the backdrop of a potential Fed pause on rate cuts in January, geopolitical issues have become the short-term focal point. Conflicts involving the US and Venezuela, the situation in Greenland, and tensions with Iran have once again stirred global investors' unease about frequent geopolitical clashes, making it difficult for the short-term fervor surrounding gold to subside.
Written by: Li Qi Practicing Qualification: F3046227 Trading Advisory Qualification: Z0016145 Disclaimer: The information in this report is sourced from publicly available materials. Our company makes no guarantees regarding the accuracy, reliability, or completeness of this information, nor does it warrant that the included information and suggestions will remain unchanged. We have strived for objectivity and fairness in the report's content. However, the views, conclusions, and recommendations are for reference only and do not constitute a promotion for any specific product or business, nor do they serve as a basis or suggestion for operations in related varieties. Investors making any investment decisions based on this information are solely responsible for their profits and losses, which are unrelated to the company and the author.
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