US Data Weakens, Gold Rebounds
Gold strengthened again and briefly approached the $5,070/oz area on Tuesday (February 10th), after a series of US data made the market increasingly confident that the Fed would be more "friendly" regarding interest rate cuts. The main driver came from cooling economic signals—from stagnant December retail sales to other indicators indicating sluggish demand.
This combination of data has led to lower interest rate expectations, which is usually a tailwind for gold because it doesn't yield—making it more attractive when interest rates are expected to soften. Market attention is also turning to the next big data (employment and inflation) that could determine whether the "more dovish Fed" trend strengthens or stalls.
On the demand side, there is still strong structural support: the People's Bank of China (PBOC) reportedly extended its gold purchases for the 15th consecutive month in January. This reinforces the "reserves shift" narrative that keeps gold attracting significant buyers despite high volatility.
Geopolitical tensions haven't disappeared either—and that's what often keeps gold's corrections "sustained." US-Iran tensions have once again made headlines through the Strait of Hormuz after the US issued guidelines for US-flagged vessels to avoid Iranian waters when passing through. As long as the risk of escalation in the world's key energy region remains, safe-haven bids tend to emerge quickly whenever the market becomes anxious.
Source: Newsmaker.id
