EBC Markets Briefing | Bullion gains on cooling US inflation

Gold inched up on Monday as US inflation cooled further as expected in January. Futures traders slightly raised the odds of a June rate cut, with the implied probability now just above 70%.

Onshore gold ETF holdings in China increased by 17.7 tons in the first three weeks of February, close to the monthly record inflow of 20.9 tons set last October, according to data from the WGC

The gold market received a boost earlier last month, with the announcement of a pilot program allowing insurers to buy the metal for the first time. The investment demand helped offset weaker jewellery consumption.

Meanwhile, strong US demand for gold is pulling bullion out of some countries as traders try to stockpile it before Trump’s tariffs on Canada and Mexico kick into high gear.

The precious metal is shifted into the Commodities Exchange Centre and other vaults in New York. Gold reserves in London’s vaults fell for the third consecutive month in January, data from the LBMA showed.

The White House cancelled a joint press conference for Trump and Zelensky last week following the collapse of talks with President Donald Trump after a televised explosive clash in the Oval Office.

Bullion has rebounded from the low hit on 6 February above $2,830, but the rally was rejected by where the tumble began. As such we remain bearish on it in the short term.

EBC Wealth Management Expertise Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Group Corporate News or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.