Safe Haven Weakens—Gold Falls After Jobs Data
Gold prices weakened on Thursday after a three-day rally that saw the precious metal set a new record. The market began to take profits, while the “safe-haven premium” thinned as concerns about a rapid escalation in the US-Iran conflict eased and the US political tone calmed.
Spot gold: around US$4,600.00/oz
US gold futures (Feb): around US$4,613.00/oz
Gold had previously touched a record US$4,642.72/oz on Wednesday.
Iran risk “temporarily eased” - safe havens eased
Trump said he had received information that the deadly crackdown in Iran was easing and there were no signs of imminent mass executions. The market assessed the likelihood of an immediate US military response as less, thus reducing demand for gold as a hedge against risk. Trump calms Fed drama
Trump also said there were no plans to fire Fed Chairman Jerome Powell, which helped ease market concerns about the central bank's independence—one of the factors that had previously pushed gold to a record high.
Additional spice from today's US economic data—its impact on gold
US data releases on Thursday signaled that the economy remains quite resilient, which tends to support the dollar and yields—two factors that typically weigh on gold.
Initial Jobless Claims fell to 198,000 (below the 215,000 estimate) for the week ending January 10. This suggests the labor market remains tight, despite concerns about early-year seasonal factors.
The Empire State Manufacturing Index (New York) rebounded to 7.7 (expansion) from -3.7, indicating improving factory activity.
The Philadelphia Fed Manufacturing Index also rose to 12.6 from -8.8, bolstering the narrative of a regional manufacturing recovery.
Impact on gold: Stronger data makes the market more comfortable with the Fed's slow dovish stance, making gold more vulnerable to short-term corrections (with profit-taking increasing). However, gold still has a cushion if expectations of a 2026 interest rate cut persist.
Source: Newsmaker.id
