USD Held Back, Gold Tries to Rebound Ahead of CPI
Gold strengthened in Friday's Asian session after being pressured to a weekly low the previous day. The XAU/USD commodity attracted renewed buying interest and returned to the psychological $5,000/oz area, as the market awaited the release of the US Consumer Price Index (CPI), which is expected to trigger further volatility and determine the direction of Federal Reserve interest rate expectations.
Gold's recovery momentum emerged amidst the US dollar's struggle to maintain its strength. Although a stronger US Nonfarm Payrolls (NFP) report on Wednesday had led the market to reduce the chances of a Fed rate cut in March, investors still expect room for a rate cut this year. This combination kept the dollar subdued and gave gold—which offers no yield—some breathing room.
According to the latest data, US initial jobless claims fell to 227,000 for the week ending February 7. This figure was slightly above the 222,000 estimate, but lower than the previous week's revised 232,000. Meanwhile, continuing claims rose to 1.862 million, suggesting ongoing "subtle weakness" in the labor market. This mixed data helped limit the dollar's strength and revived interest in safe-haven assets.
In addition to macroeconomic factors, shifts in global risk sentiment also played a role. The weakening tone in equity markets encouraged defensive flows, thereby regaining support for gold. However, the market remains cautious: investors are awaiting confirmation from the US CPI release before aggressively adding to their positions, so gold's movement could potentially fluctuate within a limited range until inflation data is released. (asd)
Source: Newsmaker.id
