Ahead of US-Iran Talks, Gold Under Pressure: Dollar a Key Brake
Gold (XAU/USD) weakened again during the European session on Thursday (February 5). After briefly bouncing off the $4,800 area, the intraday rally began to lose steam, and prices fell back amidst the ongoing tension between risk-off and risk-on sentiment.
According to the latest monitoring, gold was trading in the $4.86,000–$4.88,000/oz range, down around 1.5% to 2.0% from the previous close. Its daily range was also wide—moving from around $4,790 to $5,024—indicating continued high volatility and the market's lack of a "comfortable price" following last week's significant decline.
The main pressure came from the strengthening US dollar. The greenback briefly rose to a two-week high, making gold (priced in USD) relatively more expensive for non-US buyers and reducing short-term buying incentives.
From a geopolitical perspective, US-Iran tensions remain in the headlines, but the market is also seeing opportunities for de-escalation after the US-Iran talks in Oman (Friday) became clearer. The result: safe-haven demand exists, but not as strong as when the market perceived the risk of conflict as "imminent."
However, the dollar hasn't truly "run free." Weak employment data, such as the ADP and market expectations that the Fed will ultimately lean toward dovishness, have limited room for USD strengthening—this is what's holding gold back from a deeper decline. On the other hand, comments from Fed officials, who appear more cautious about interest rate cuts, have further zigzagged gold's direction.
In conclusion, heading into the European session, gold is in rebound mode that's running out of gas—squeezed by a strengthening dollar, while restraining factors (rate cut expectations + remaining geopolitical risk premium) are preventing the decline from being straightforward. The market will typically wait for the next trigger from US data and the tone of major central banks to determine whether to continue the recovery or return to a "shakeout."
Source: Newsmaker.id
