Higher-than-expected core inflation data in January dimmed prospects of an early and deep Federal Reserve rate cut. In early January, the market was pricing 150 bps of cuts starting from March, but that expectation has been delayed until June and reduced to 70-80 bps. Confirmation of the timing and intensity of rate cuts should guide Gold prices.

Central banks bought 30t of Gold in December, lifting official buying at 1,037t in 2023.

Gold’s spot premium in China and India suggests healthy physical demand.