Gold consolidates near record highs

Asia-Pacific Market

Japan: Inflation in Tokyo accelerated to 2.5% year-over-year in January, aligning with expectations and modestly surpassing December’s 2.4% rate. The data strengthens the Bank of Japan's case for potential rate hikes. Meanwhile, the unemployment rate dropped to 2.4%, beating the anticipated 2.5%, and the job-to-applicant ratio stood at 1.25, indicating robust labor market conditions.

Australia: The Q4 Producer Price Index (PPI) increased by 0.8% quarter-over-quarter, slightly below the 1.0% forecast and the previous reading of 0.9%. This lower-than-expected inflation indicator reinforces speculation that the Reserve Bank of Australia (RBA) could initiate rate cuts soon, with all four of the country’s major banks projecting a reduction as early as February.

After the news the Australian dollar (AUD) and New Zealand dollar (NZD) are leading among G10 currencies, while the Japanese yen (JPY) remains the weakest.

US Market

Investors will closely watching the release of the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge. Expectations suggest the core PCE will hold steady at 2.8% year-over-year, while the headline measure is forecast to rise from 2.6% to 2.8%. This data will be crucial in shaping rate expectations moving forward.

Commodities

Gold (XAU/USD): The yellow metal remains near its all-time high, consolidating within a narrow range ahead of the European session. Uncertainty surrounding US trade policies and ongoing geopolitical tensions continue to support safe-haven demand.

Crude Oil (WTI): The US crude benchmark hovers around $72.85 per barrel in the early Asian session, with markets assessing potential trade disruptions. A key factor remains whether the US administration will impose a 25% tariff on Canadian and Mexican crude imports—a decision that could take effect as early as Saturday.