Gold Rises Amid Geopolitical Tensions:

Gold prices witnessed an increase during the current trading period on Monday,
due to escalating tensions in the Middle East, boosting the metal’s attractiveness as a safe haven.
Prices surpassed the $2050 per ounce level.

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Investors Focus on Federal Reserve Meeting This Week

People’s Bank of China Aims to Maintain Acceptable Liquidity in the Banking System

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This rise comes as traders await the U.S. interest rate decision and statements from Federal Reserve Chairman Jerome Powell this week to gather insights on the interest rate path. Investors express concern over increasing geopolitical tensions following an incident targeting U.S. forces near the Syrian border in Jordan, where three individuals were killed in a drone strike.

The Federal Reserve is expected to keep interest rates unchanged in its upcoming meeting on January 30-31.
However, much attention will be focused on Powell’s statements.

According to data released on Friday, U.S. prices moderately increased in December,
sustaining inflation below 3% for the third consecutive month.
This could provide the Federal Reserve an opportunity to begin interest rate cuts this year.

According to the U.S. Department of Commerce, the core personal consumption expenditures (excluding food and energy) rose by 0.2% monthly in December and increased by 2.9% annually, compared to expectations of 0.2% and 3%, respectively.

Consumer spending also showed an increase of 0.7% in December, surpassing expectations of 0.5%.

Investors Focus on Federal Reserve Meeting This Week:

The current week started with stability for the dollar as investors analyze U.S. economic data ahead of the Federal Reserve’s meeting.
Simultaneously, reduced geopolitical tensions in the Middle East diminish investors’ risk appetite.

The Dollar Index, measuring the performance of the U.S. currency against a basket of six major currencies,
remained close to its six-week high at 103.50 on Monday, near the level of 103.82 recorded last week.

The index is set to register a 2% increase in January, following diminished expectations of significant and immediate U.S. interest rate cuts.

Investors’ focus this week is on the Federal Reserve’s monetary policy meeting, which will last two days starting Tuesday.
The central bank is widely expected to keep interest rates unchanged,
and investors are keenly awaiting statements from Fed Chair Jerome Powell.

Investors will also monitor a series of economic data,
including U.S. jobless claims and employment reports, helping assess the strength of the job market.

People’s Bank of China Aims to Maintain Acceptable Liquidity in the Banking System:

The People’s Bank of China (PBOC) injected CNY 500 billion (USD 70 billion) into the banking system on Monday through seven-day reverse repos with an interest rate of 1%. According to the central bank, this move aims to “maintain sufficient and available liquidity in the banking system.”

The reverse repos, also known as “reverse repo,” involve the central bank buying securities from commercial banks through bids,
with an agreement to sell them back at a later time.

In the foreign exchange market, the Chinese yuan declined against the dollar by 23 basis points,
reaching 7.1097 yuan per dollar compared to 7.1074 yuan at the end of the previous Friday’s trading.

It’s worth noting that Chinese rules allow the yuan to fluctuate up to 2% around the central parity rate set
by the central bank in each foreign exchange market trading session.

The guidance rate for the yuan against the dollar is determined based on buying rates provided by major financial institutions
before the start of interbank trading daily.

Gold Rises Amid Geopolitical Tensions