In January, the British Retail Consortium’s Shop Price Index rose by 1.5% compared to the previous year, exceeding the expected 0.7%. This increase signals a higher than anticipated retail inflation rate. During Tuesday’s Asian session, the EUR/USD pair is trading around 1.1870 after gaining over three days. While the overall trend is positive, the pair still shows losses below 1.1900.

Gold Prices And The Federal Reserve Meeting

Gold prices remain close to record highs due to safe-haven demand and a weak USD as we approach the Federal Reserve meeting. Recent data shows that gold has attracted buyers for seven consecutive days. Hyperliquid’s decentralized exchanges have enjoyed strong growth, with open interest reaching $790 million—more than double its amount from the past month. Tether Gold (XAU₮) dominates the Gold-backed stablecoin market, accounting for 60% of the total market supply. This growth reflects increased demand for tokenized assets as gold prices rise. FXStreet advises readers to research thoroughly before investing, as there are risks and unpredictable market conditions. The information shared is for informative purposes only and not meant as trading advice.

UK BRC Shop Price Inflation

The UK BRC shop price index for January shows a rise of 1.5%, more than double the expected 0.7%. This indicates that inflation is proving stickier than earlier estimates. Official data from late 2025 revealed that the Consumer Price Index remains above the Bank of England’s 2% target. This persistent inflation complicates the Bank of England’s ability to consider interest rate cuts soon. Following the morning’s data, interest rate swap markets now suggest less than a 40% chance of a rate cut before the third quarter of 2026. This marks a significant change from just a month ago, when a cut by June was nearly guaranteed. For traders, this strengthens the argument for a bullish outlook on the Pound Sterling. Strategies that could benefit from a rising GBP/USD, such as buying call options that expire after the next central bank meeting, should be considered to capture potential gains. This approach is backed by recent data showing a steady increase in net-long positions on the Pound for three weeks in a row. Meanwhile, we need to keep an eye on Gold, which continues trading near its all-time highs of over $5,100. The trend is mainly driven by weakness in the US Dollar and market concerns over trade policy—a situation reminiscent of the 2018-2019 period. Global gold-backed ETF inflows have also risen sharply this month, indicating that investors are seeking safe havens. Although the high price means that outright long positions in Gold carry significant risk, the upward trend is clear. A strategy involving buying call spreads on Gold futures could allow continued participation in the rally while defining risk. The strong interest in tokenized gold throughout 2025 highlights a growing desire for assets outside traditional banking systems and away from the US Dollar. Create your live VT Markets account and start trading now.

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