Gold in positive territoriy ahead of US session with US and Russia talking over Ukraine

LONDON (February 13) Gold’s price (XAU/USD) is picking up where it left off on Tuesday, with prices back up to $2,920 at the time of writing on Thursday, while Bullion traders shrugging off the United States (US) Consumer Price Index (CPI) data for January released on Wednesday. Traders are also ignoring the possibility of a peace deal formation with United States (US) President Donald Trump and Russian President Vladimir Putin, who have spoken on the phone to outline a meeting soon to work out the broad strokes of a peace deal. Despite these quite substantial tail risks, Gold is rallying again, revealing a firm commitment from traders to keep residing in the safe haven asset. 

Meanwhile, traders are digesting Federal Reserve (Fed) Chairman Jerome Powell’s two testimonies at Capitol Hill before lawmakers. The release of January’s Consumer Price Index (CPI) numbers on Wednesday proved that the Fed has the right angle to keep rates steady for longer. US yields surged during the past two days, though with the pickup in Gold buying, the question will be whether US yields can keep rising in tandem with an uptick in Gold, which is a bit contradictory. 

Daily digest market movers: EU pushing back

• US President Donald Trump said that Hamas must release all hostages by noon on Saturday or ‘all hell will break loose’, Reuters reports. 
• Ukraine talks are spurring risk assets and the Euro (EUR) against the US Dollar (USD). This, in turn, triggers a softer US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, which is beneficial for Gold. 
• This Thursday a general NATO meeting is being held. Several European countries are condemning the approach from President Donald Trump. By committing to Ukraine not taking part into NATO and Ukraine being forced to give up current occupied areas, negotiations are already starting on the backfoot with Ukraine being involved as such, Bloomberg reports.
• After the hotter-than-expected January CPI reading, the CME FedWatch tool shows a 64.3% chance that interest rates will remain unchanged at current levels in June, compared to 50.3% before the release. This suggests that the Fed would keep rates unchanged for longer to fight against persistent inflation. 

FXStreet