Gold fluctuates near 7-month highs, awaiting clarity from Fed

Gold prices have settled near their 7-month highs ahead of a speech from U.S. Federal Reserve (Fed) Chair Jerome Powell. This is mainly because markets are expecting Powell to reveal inflation data and the Fed's monetary policy course.

Over the past week, in anticipation of a slowdown in the pace of U.S. interest rate hikes, gold prices have risen markedly. There have been signs of a cooling in the job market. It suggests that price pressures are at their highest. Consequently, the markets assume that the Fed’s policy should become less tight. Powell is expected to confirm these assumptions at today's banking symposium in Sweden.

The final inflation data will be under the spotlight, as the U.S. inflation rate in December is expected to be slower compared to the previous month. Nevertheless, inflation remains above the Fed's 2% target. That is why the markets continue to watch it closely. 

The Fed is expected to raise the rate by 0.25% at its February 1 meeting.