Strong NFP, Gold Weakens: CPI Leads
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data prompted market participants to shift expectations of a "quick rate cut," while a stronger dollar added pressure on the precious metal.
Spot gold fell 0.42% to $5,062.94/oz.
Other metals also corrected after a sharp rally the previous day. Silver fell 0.99% to $83.481/oz, indicating the market is beginning to cool down from the high volatility that had occurred.
Pressure was also seen on precious metals. Platinum weakened 1.21% to $2,119.75/oz, while palladium fell 1.59% to $1,714.25/oz.
Fundamentally, a strong NFP report typically raises yields and reduces the appeal of gold (as gold does not yield a yield). However, the market is still weighing mixed signals: the previous day's stagnant US retail sales had raised concerns about consumer purchasing power, so the safe-haven trend hasn't completely dissipated.
The focus next shifts to further data releases—particularly weekly jobless claims and the US CPI—which have the potential to determine whether the market will again aggressively price in interest rate cuts, or instead lock in a "higher for longer" scenario that tends to limit gold's upside.
Source: Newsmaker.id
