Gold Dragged Down by Dollar, But Not Yet in Freefall
Gold prices weakened again for a second day, dragged down by a stronger dollar and a risk-on mood ahead of the release of the Fed's meeting minutes. In thin Asian trading due to the Lunar New Year holiday, gold briefly touched $4,922/oz before settling in the $4,948–$4,950/oz range (down around ~1%). Pressure also spread to other metals: silver fell around 2.7%.
Despite the decline, gold's decline still appears "contained" as the market is reluctant to place large single-directional bets. The US dollar has indeed strengthened (the dollar index rose around 0.2%), but expectations of Fed policy easing have not disappeared—so gold's downside remains cushioned, especially when volatility is easily triggered by thin volume.
The main catalyst this week is the FOMC Minutes scheduled for release on Wednesday, February 18 (the Fed's official schedule), followed by the Fed's favorite inflation data, the PCE, on Friday, February 20. Meanwhile, the market is also monitoring activity data, such as the Empire State Manufacturing Survey, released today (February 17th), as it could potentially boost the dollar and yields.
Beyond data, geopolitical factors remain a "restraint" on gold's decline: the market is monitoring the new round of US-Iran nuclear talks in Geneva. If negotiations escalate, safe-haven demand could quickly return; if they subside, risk-on sentiment could become more dominant and hinder gold's recovery. (Asd)
Source: Newsmaker.id
