Gold Falls in Thin Trading, Holds Near $5,000
The precious metal weakened in relatively quiet trading, as many market participants in Asia were inactive due to the Lunar New Year holiday, while US markets were also closed. This reduced liquidity, and price movements were more influenced by short-term position adjustments.
Gold prices fell around 0.9% but remained around the psychological level of $5,000 per ounce. On Friday, gold briefly rose 2.4% after moderate US inflation data eased concerns about a price spike and strengthened the argument that the Federal Reserve has room to cut interest rates—a factor that generally supports gold, as it offers no interest yield.
However, market participants believe gold remains in a consolidation phase. Pepperstone Group strategist Dilin Wu said the market is still "rebalancing" bullish and bearish positions without a strong enough catalyst to break through the trading range. He added that the $5,100 area has failed to be broken through several times because profit-taking at the peak triggered selling pressure.
With mainland Chinese markets closed all week, liquidity during Asian trading hours is thinner than usual. On the demand side, retail interest in precious metals in China has reportedly remained high in recent months, prompting authorities in Shenzhen to issue a stern warning regarding “illegal gold trading activities,” including apps offering leverage to retail investors and live broadcasts promoting the sale of gold bullion.
In the silver market, China's domestic supply situation is reportedly still very tight, although signs of easing have begun to emerge in recent days. Inventories on the Shanghai Gold Exchange and Shanghai Futures Exchange are at historic lows, while silver futures prices are trading well above longer-term contracts—an unusual pattern given the generally steepening futures curve.
Marc Loeffert, a trader at Heraeus Precious Metals, stated that there are early indications that speculation is easing on the Shanghai Futures Exchange. Changes in exchange rules limiting the rate of inventory outflows are expected to ease the tight domestic supply. He also highlighted that silver's rapid rally has begun to pressure its use in the solar panel industry, potentially making silver prices more vulnerable to changes in investor sentiment going forward. As of the latest update, spot gold was down 0.9% at $4,996.55 per ounce, while silver was down 0.9% at $76.73; the Bloomberg Dollar Index edged up 0.1%. (alg)
Source: Newsmaker.id
