2024.01.0218:11:00UTC+00Gold Shows Modest Move Back To The Upside

Following the pullback seen to close out 2023, the price of gold showed a modest move back to the upside on the first trading day of the New Year.

Gold for February delivery inched up $1.60 or 0.1 percent to $2,073.40 an ounce after slumping by $21.30 or 1.0 percent over the two previous sessions.

The uptick by gold came as traders remain optimistic about interest rate cuts by the Federal Reserve in the coming months.

CME Group's FedWatch Tool is currently indicating a 71.9 percent chance the Fed will cut rates by a quarter point in March.

Gold may also have benefited from its appeal as a safe haven, as Middle East tensions escalated after U.S. helicopters repelled an attack on Sunday by Iran-backed Houthi militants on a Maersk container vessel in the Red Sea.

Iran subsequently announced that it has dispatched a destroyer to the Red Sea, although state media said the Alborz destroyer is operating as part of the flotillas that take part in regular missions in international waters.

However, the increase by the price of gold was limited by a jump in the value of the U.S. dollar, with the U.S. dollar index climbing by 0.9 percent.