Gold prices settle back above $1,800, up a third straight session

Price action

• February gold 
  GC00,
  -0.07%
   
  GCG23,
  -0.07%
  rose $3.50, or 0.2%, to settle at $1,801.50 per ounce on Comex. Prices had settled below the key $1,800 mark in each of the previous three trading sessions.

• Silver for March
  SI00,
  -0.16%
   
  SIH23,
  -0.16%
  delivery added 32 cents, or 1.4%, to $23.246 per ounce.

• March palladium prices
  PAH23,
  -0.68%
  climbed by $76.50, or 4.1%, to $1,930.80 per ounce, while January platinum
  PLF23,
  +0.04%
  rose $3.10, or 0.3%, to $1,014.60 per ounce.

• Copper prices for March
  HGH23,
  -0.57%
  climbed 2 cents, or 0.6%, to $3.8835 per pound.

Market drivers

“The Chinese central bank buying gold is one of the reasons why gold has risen,” Chintan Karnani, director of research at Insignia Consultants told MarketWatch. “Chinese retail demand for gold is expected to rise sharply as the nation reopens freely.”

China recently announced measures to roll back some of its COVID-19 restrictions.

Gold investors are looking at a lot of event risk in the coming days, including U.S. inflation reports on Friday and next week, as well as a meeting of the Federal Reserve where investors expect the central bank to raise its benchmark interest rate by 0.5 percentage points.

Ahead of that key round of U.S. inflation data, a softer dollar helped to support gold prices, said Edward Moya, senior market analyst at OANDA, in a market update.

Next week, the Federal Reserve is expected to “downshift” to a half-point interest rate-hike, but traders will want to hear what it has to say about the trend of inflation and where rates could peak, said Moya.

Still, Karnani believes gold needs to trade over $1,800 on Friday, as well as the Thursday after the FOMC decision next week, to near the $2,000 level.

The $2,000 price is “possible if gold trades over $1,800 after the FOMC” decision, he said.

In its 2023 outlook report released Thursday, the World Gold Council outlined its views on gold under three different economic scenarios.

Read more: World Gold Council outlines what’s in store for gold with the global economy at a ‘crossroads’