US Data Boosts Dollar, Gold Retreats from Record Area
Gold prices began to weaken on Friday after a sharp rally that had brought the precious metal to a record high earlier in the week. Spot gold fell slightly by 0.2% to around $4,64.48 per troy ounce, while US gold futures for February delivery also fell to around $4,615. However, gold still has the potential to close the week up around 2% after peaking at $4,642.72 on Wednesday.
The main pressure came from solid US economic data—particularly jobless claims. Initial jobless claims fell by 9,000 to 198,000, lower than market expectations of 215,000. This data helped lift the dollar to a six-week high, making gold (priced in USD) more expensive for foreign buyers.
From a geopolitical perspective, the safe-haven "fuel" is also starting to diminish. Several reports indicate that the intensity of the protests in Iran appears to have subsided since the beginning of the week, making the market slightly more willing to take risks and reducing the need to park funds in safe-haven assets like gold.
As a result, gold's movement now appears more like a healthy correction after an extreme spike—rather than a major trend change. The market's focus going forward will remain on two things: the strength of US data (which determines the direction of the dollar and interest rate expectations) and developments in Iran (which determine the safe-haven "risk premium").
Source: Newsmaker.id
