Gold rose to the $2,715 per ounce mark on Thursday, extending gains from the prior session to test its highest in two months amid growing expectations that the Fed will lower interest rates this year. Retail sales rose less than expected in December while initial unemployment claims rebounded sharply in January. The results aligned with the backdrop that favors lower interest rates by the Fed to prevent a sharper economic slowdown this year, magnifying the impact of yesterday’s slower core CPI print on gold prices. Such developments lift bullion and Treasuries across all durations as lower monetary restriction limits the opportunity cost of holding non-yielding assets. Expectations of lower rates were also present in the UK following their softer monthly GDP print and in the Eurozone as energy prices abated despite tighter supply of natural gas. Elsewhere, Israel and Hamas reached a ceasefire and hostage agreement, easing demand for safe-haven assets.
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