Top Stories This Week: Gold Price Pulls Back After Spike, Central Banks Boost Holdings

Gold Investing
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Gold faced major ups and downs this week as the market digested surprising employment data and the US Federal Reserve's latest rate hike.

It was a week of ups and downs for the gold price, which traded as high as US$1,957 per ounce and as low as US$1,863. At the time of this writing on Friday (February 3), the yellow metal was around US$1,865.

What factors are responsible for that broad range? The US Federal Reserve played a role mid-week.

The central bank's first meeting of the year ran from Tuesday (January 31) to Wednesday (February 1), and it ended with an interest rate hike of 25 basis points, the smallest since last March. The Fed's benchmark interest rate now sits at 4.5 to 4.75 percent.

Chair Jerome Powell's post-meeting comments always attract attention, and this time around he said that the process of disinflation has begun — in other words, prices are now rising at a slower pace than they were previously.

Powell also addressed the question of whether the US is heading for a recession, saying he sees a path back to 2 percent inflation without "a really significant economic decline or a significant increase in unemployment."

After rising ahead of the Fed meeting, gold continued to gain after it wrapped up, reaching its peak for the week on Thursday (February 2). But the precious metal fell off a cliff on Friday (February 3) as January jobs data in the US surprised to the upside — employers added 517,000 jobs, while the unemployment rate sank to 3.4 percent, the lowest since May 1969.

The unexpected reading has generated questions about the Fed's path forward. With the employment situation looking strong, the central bank may make the decision to keep rates higher for longer. For now, market participants will have to wait and see.

Gold demand strongest in over a decade

The Fed and employment weren't the only news making headlines in the gold space this week. The World Gold Council had its own announcement, reporting that 2022 was the strongest year for gold demand in more than a decade.

According to the organization, annual gold demand (excluding over-the-counter transactions) came in at 4,741 metric tons (MT), which is close to the amount seen in 2011 — a year marked by "exceptional investment demand."

Strong buying from central banks was a hot topic in Q3, and the World Gold Council notes that the fourth quarter was much the same. "Huge" Q4 central bank buying of 417 MT brought the 2022 total to a 55 year high of 1,136 MT.

Turkey's central bank was the top gold buyer in 2022, but the World Gold Council also highlights China's return to purchasing. The People's Bank of China increased its gold reserves for the first time since late 2019, adding 62 MT in November and December of last year. The country's reserves are now higher than they've ever been at over 2,000 MT.

Check out INN's VRIC interviews

I want to wrap up with a brief note on the Vancouver Resource Investment Conference, which the INN team attended this past week. It was a busy event, and I found that resource sector sentiment was largely positive among attendees.

We've already begun publishing our interviews from the show, and I'm looking forward to sharing the rest of them with you in the days to come. You can click here for the full YouTube playlist — check it out if you'd like to see my discussions on gold, silver, uranium and more with experts like Rick Rule, Ross Beaty and Lynette Zang.

Want more YouTube content? Check out our expert market commentary playlist, which features interviews with key figures in the resource space. If there's someone you'd like to see us interview, please send an email to

And don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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