Gold experienced volatility, rebounding after a significant drop, influenced by US inflation data and Federal Reserve policy expectations. The precious metal remains below $5,000, with traders closely watching economic indicators for future direction.
- Gold rose towards $4,990 per ounce after a prior selloff driven by broad market risk aversion.
- Softer-than-expected US inflation data eased pressure on Treasury yields and weakened the dollar, supporting gold.
- Annual inflation slowed to 2.4% in January, and core inflation eased to 2.5%.
- Continued central bank buying, geopolitical tensions, and concerns over currency debasement underpin long-term demand.
- Upbeat US Nonfarm Payrolls data initially reduced expectations of a Fed rate cut in March.
- Unimpressive US Jobless Claims data and rising Continuing Claims potentially support gold.
- A weaker tone in equity markets is driving flows towards safe-haven assets like gold.
- Traders are awaiting the US Consumer Price Index (CPI) report for further direction.
The combination of factors such as inflation data, central bank policy speculations, and global risk sentiment creates a complex environment for the asset. Weaker economic data and persistent global uncertainties may drive investment towards this safe-haven asset. Any shift in these factors can significantly impact the direction and perceived value of the asset.