Gold prices rose in European trade for the second session, hitting nine-month highs as dollar weakened against a basket of major rivals. 

Dollar is hovering near eight-month lows on prospects the Federal Reserve will slow down its policy tightening and rate hikes from 0.5% to 0.25% in February. 

Gold Prices Today

Gold prices rose 0.6% to $1,942 an ounce, the highest since April 2022, with a session-low at $1,930, after rising 0.3% yesterday, the second profit in three dollars as dollar weakened. 

The Dollar

The dollar index fell 0.3% on Tuesday on track to test eight-month lows again against a basket of major rivals, in turn underpinning gold and other precious metals. 

Pricing for a 0.25% rate hike by the Federal Reserve in February stands at 100%, slowing it down from recent 0.5% rate hikes.

Expectations

Many analysts currently expect gold prices to build up an upward momentum as the Fed is forced to slow down its pace of policy tightening, in turn underpinning the precious metal. 

Actual Demand

India is expected to cut down its gold importing fees, in turn raising retail sales and making the metal cheaper ahead of its peak demand season. 

Euro rose in European trade against dollar for the fifth straight session, almost hitting nine-month highs on European interest rate prospects. 

The gains come ahead of an important batch of European data in January, which will provide important clues on the strength of the economy in the first quarter. 

EUR/USD rose 0.25% to 1.0898, with a session-low at 1.0866, after closing up 0.2% yesterday, the fourth profit in a row, hitting nine-month highs at 1.0925 following bullish remarks by ECB officials. 

Bullish Remarks

ECB officials strongly hinted in recent remarks at successive 0.5% rate hikes in February and March and beyond.

ECB President Christine Lagarde said in the Economic Forum in Davos that inflation remains too high, and the ECB will continue hiking rates until inflation is brought back to 2%.

European Rates

Markets now widely expect the European Central Bank to increase interest rates by successive 0.5% hikes in upcoming meetings to control inflation. 

Data

Now investors await a batch of important data later today on European manufacturing and services sectors for January, important for gauging the health of the economy in the first quarter of the year. 

Gold prices edged up on Monday as investors monitor dollar's movements and assess economic outlooks.

After her earlier warnings about economic slowdown in a third of the global economy, IMF Chief Cristalina Goergiva expresses optimism that the US economy might just avoid recession.

As recession concerns spread, major tech companies like Google, Microsoft, Meta, Twitter, and Amazon announced a big wave of layoff to cut costs.

Otherwise, the dollar index rose 0.1% as of 19:20 GMT to 102.07, with a session-high at 102.2, and a low at 101.5. 

Gold prices rose 0.1%, or two dollars as of 19:22 GMT to $1,930.4 an ounce. 

US stock indices gained ground on Monday as investors continue to analyse incoming corporate quarterly results. 

Both Microsoft and Tesla will announce their quarterly results later this week for the last three months of 2022. 

As recession concerns spread, major tech companies like Google, Microsoft, Meta, Twitter, and Amazon announced a big wave of layoff to cut costs. 

Dow Jones rose 0.6%, or 202 points to 33,577 as of 15:43 GMT, while S&P 500 climbed 0.85%, or 33 points to 4006, as NASDAQ added 1.3%, or 150 points to 11,290.