In January, the British Retail Consortium’s Shop Price Index increased by 1.5% year-on-year, surpassing the expected 0.7%. This rise indicates a higher-than-anticipated retail inflation rate.
The EUR/USD pair, after seeing gains over three days, is trading around 1.1870 during Tuesday’s Asian session. Despite a general bullish trend, this pair holds losses below 1.1900.
Gold Prices And The Federal Reserve Meeting
Gold prices remain near all-time highs due to safe-haven demand and a weak USD, ahead of the Federal Reserve meeting. Recent figures show that gold consistently attracts buyers, remaining positive for the seventh consecutive day.
Hyperliquid’s decentralized exchanges have seen double-digit gains, with open interest reaching $790 million. This figure represents more than 200% growth over the past month.
Tether Gold (XAU₮) leads the Gold-backed stablecoin market, making up 60% of total market supply. It reflects an increase in demand for tokenized assets alongside rising gold prices.
FXStreet reminds readers to conduct thorough research before investing due to associated risks and market unpredictability. The information provided is strictly for informational purposes, not recommendations for trading.
UK BRC Shop Price Inflation
The UK BRC shop price index for January came in at 1.5%, which was more than double the 0.7% we were expecting. This suggests that inflation is proving much stickier than previously thought. This follows official data from late 2025 which showed the headline Consumer Price Index still holding stubbornly above the Bank of England’s 2% target.
This persistent inflation makes it very difficult for the Bank of England to consider cutting interest rates anytime soon. In response to this morning’s data, interest rate swaps markets have already moved to price in less than a 40% chance of a rate cut before the third quarter of 2026. This is a significant shift from just a month ago when a cut by June was almost fully priced in.
For traders, this strengthens the case for a bullish stance on the Pound Sterling. We should consider strategies that benefit from a rising GBP/USD, such as buying call options that expire after the next central bank meeting to capture potential upside. This view is supported by recent positioning data, which has shown a steady increase in net-long speculative positions on the Pound for three consecutive weeks.
At the same time, we must pay attention to Gold, which continues to trade near its all-time highs of over $5,100. This is primarily a story about US Dollar weakness, fueled by market anxiety over trade policy, a theme we saw play out during the 2018-2019 period. Global gold-backed ETF inflows have also accelerated this month, a clear sign that investors are actively seeking safe havens.
Given the high price, outright long positions in Gold carry significant risk, but the trend is clearly upward. A strategy of buying call spreads on Gold futures could allow for continued participation in the rally while clearly defining risk. The strong demand for tokenized gold throughout 2025 also shows a widespread appetite for assets outside the traditional banking system and away from the US Dollar.
