Gold prices remained weak even as stock markets registered gains following the post-CPI selloff in the US markets.
The latest Consumer Price Index rating showed annual inflation dropped less than expected to 3.1 percent in January from 3.4 percent the previous month. Analysis had expected the figure at 2.9 percent.
The readings had caused US stock markets to shed 1.2 percent, while bond yields jumped.
Stocks reverse
Bourses, however, reversed losses after Fed chair Jerome Powell said the inflation numbers were along expected lines.
On Wednesday, Meta climbed 2.9 percent and Tesla was up 2.6 percent, contributing to the S&P 500’s 1 percent and the Nasdaq 100’s 1.2 percent increase.
“Notably, ride-hailing companies Lyft and Uber had strong performances. Uber’s shares surged by 14.7 percent to a record high after unveiling a $7 billion share buyback plan, fueled by a recovery in ride-share revenue and robust demand in its food delivery business. Lyft soared by 35.1 percent following better-than-expected profits and a positive free cash flow outlook for 2024,” the Saxo Bank MENA Weekly Market Report said.
Gold stays weak
Prices for gold prices fell below $2,000 an ounce to a two-month low after the CPI data was out, but failed to swing back.
“Gold remained depressed under the $ 2,000 mark, still supported by the 100DMA but lacking any signs of recovery despite yields moving lower. Silver, however, bounced higher from the $22-level support,” the report said.
Treasuries rebound
Yields across the fixed income market surged after the CPI data, but investors returned to pick up notes after the Fed’s assurances.
“The 2-year yield fell by 8 basis points to 4.58 percent, and the 10-year yield shed 3 basis points to 4.26 percent.”
Dollar pares gains
The dollar, which climbed initially following the CPI data, shed some of its gains.
The currency, however, is likely to benefit other major central banks in England and Europe bring forward their rate cuts, even as the Federal Reserve holds steady.
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