Gold prices up as geopolitical, economic uncertainty loom

Gold prices logged a marginal gain at settlement today, Feb. 6, as investors piled into the yellow metal as a geopolitical and economic safe haven amid uncertainty.

On Feb. 4, a US military fighter aircraft shot down a suspected Chinese spy balloon as it floated off the coast of South Carolina. Beijing accused Washington of “dealing a serious blow” to efforts and progress in stabilizing China-US ties, threatening respective repercussions.

Elsewhere, investors are awaiting US Federal Reserve Chairman Jerome Powell's remarks later this week, in a bid to assess prospects for the path of monetary policy.

The Federal Open Market Committee (FOMC) decided, on Feb.1, to dial down the pace of interest-rate hikes, nudging up the federal funds rate by 25 basis points (bps). This followed six larger, consecutive increments to tame spiraling inflation, which hit a 40-year peak last year.

The central bank, however, signaled additional rate increases this year “will be appropriate” in order to cool inflation that remains “elevated,” according to Fed officials.

In December 2022, FOMC raised rates by 50 bps, following a 75-bps hike in the month before.

In terms of trading, gold for April delivery climbed by less than 0.2%, or $2.90, to $1,879.50 an ounce.

Similarly, the US dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.7% to 103.656 points at 9:50 pm Makkah time.