During the Chinese New Year holiday, the price of London spot gold continued to rise, eventually reaching $2,829.85 per ounce, setting a new historical high. Compared to the domestic closing price on January 27, gold prices increased by approximately 2.73%. This rise is closely related to the uncertainty in global markets, with strong demand from investors seeking safe-haven assets.
At its January meeting, the Federal Reserve decided to maintain the target range for the federal funds rate at 4.25% - 4.50%, pausing further rate cuts. However, after the meeting, Federal Reserve Chairman Powell stated that policy has entered a "wait-and-see" phase, suggesting potential adjustments based on economic data in the future. Currently, the CME's "Fed Watch" shows an 84.5% probability of maintaining rates in March and a 15.5% probability of a 25 basis points cut. By May, the probability of maintaining the current rate is 61.6%, with a 34.2% probability of a 25 basis points cut and a 4.2% probability of a 50 basis points cut.
Although the Federal Reserve has kept rates unchanged, the global economy and geopolitical situation remain unpredictable. The Trump administration has reimposed tariffs, and the Russia-Ukraine conflict continues, further increasing global market uncertainty. These factors have supported gold prices, driving them to rise continuously.
As uncertainty about the global economic outlook increases, the appeal of gold as a safe-haven asset continues to rise. Market participants will continue to monitor Federal Reserve policy directions and international developments, particularly in the current context of paused rate cuts, where gold prices may remain strong.
