Gold rose above $1,880 an ounce on Thursday

Gold rose above $1,880 an ounce on Thursday, hovering near its strongest levels in eight months amid a general dollar weakness, as investors cautiously awaited key US inflation data that could influence the trajectory of Federal Reserve interest rate hikes. Investors are betting that the December CPI report would show further easing in price pressures, supporting the case for a less aggressive tightening from the central bank. Meanwhile, a drumbeat of Fed officials reiterated their hawkish stance this week, with Fed Chair Jerome Powell saying that “restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.” Gold is highly sensitive to the rates outlook as higher interest rates raise the opportunity cost of holding non-yielding bullion.

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