- Gold price sticks to the range-bound trade near $2035, adding 0.05% on the day.
- US weekly Jobless Claims fell more than expected last week.
- Fed’s Barkin said the central bank should be patient with rate cuts despite remarkable data showing that inflation is dropping.
- Dallas Fed L. Logan is set to speak later on Friday.
Gold price (XAU/USD) consolidates in a narrow trading band around $2035 region per troy ounce during the early Asian trading hours on Friday. Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, recovers above the 104.00 mark. The US Treasury yields edge higher, with the 10-year yield standing at 4.16%.
A decline in US Initial Jobless Claims highlights the resilience of the economy and might convince the Federal Reserve (Fed) to refrain from cutting rates in the short term. Data released from the US Department of Labor reported on Thursday that US weekly Initial Jobless Claims dropped to 218K for the week ended February 3 from 227K in the previous week, above the market consensus of 220K. Continuing Claims fell by 23K to 1.891M in the week ended January 27.
Richmond Fed President Tom Barkin said the central bank should be patient on rate cuts despite remarkable data showing that inflation is dropping. Minneapolis Fed President Neel Kashkari stated on Wednesday that he believes two or three rate cuts will take place in 2024, while Fed Governor Adriana Kugler said that the need for further data to confirm inflation is heading back to the central bank’s 2% target.
Investors looked into recent comments from Fed officials, which implied fewer rate cuts for 2024 than initially anticipated. This, in turn, weighs on the yellow metal as the high-for-longer narrative in the US diminishes the incentive for investors to buy gold as it pays no interest, thus resulting in a lower gold price.
On Thursday, Israeli troops attacked areas in Rafah, the southern border city where more than half of Gaza's population is hiding, a day after Prime Minister Benjamin Netanyahu rejected a proposal to end the war, reports Reuters. The rising geopolitical tensions in the Middle East could benefit traditional safe-haven assets like gold.
Looking ahead, Dallas Fed L. Logan is scheduled to speak later on Friday. In the absence of top-tier economic data from the United States, risk sentiment is likely to play a significant influence on the gold price.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.