Gold and Silver Slip as Strong US Jobs Data Weighs on Rate Cut Hopes
Gold and silver prices declined in Asian trading on Thursday after stronger-than-expected U.S. payrolls data reduced expectations for deeper Federal Reserve interest rate cuts. However, losses were partially limited by ongoing safe-haven demand.
Despite the pullback, precious metals have held onto much of their weekly gains. Continued weakness in the U.S. dollar and persistent geopolitical tensions between the United States and Iran have supported demand for traditional safe-haven assets.
Spot gold fell 0.7% to $5,051.26 per ounce, while April gold futures dropped 0.5% to $5,072.04 per ounce. Spot silver declined 1.3% to $83.2505 per ounce, and platinum slipped 1.6% to $2,107.30 per ounce.
Strong Nonfarm Payrolls Boost Dollar, Pressure Gold
Gold prices came under pressure after U.S. nonfarm payrolls data for January surprised to the upside. The stronger labor market reading dampened expectations that the Federal Reserve will accelerate interest rate cuts in the near term.
According to CME FedWatch data, markets are now pricing in a 94.1% probability that the Fed will keep rates unchanged in March. There is also a 78% chance of no change in April.
The payrolls report triggered a rebound in the U.S. dollar, which weighed on precious metals. A stronger dollar typically makes gold and silver more expensive for holders of other currencies.
However, the greenback steadied during Asian hours and remains slightly weaker for the week, partly due to renewed strength in the Japanese yen.
Analysts at OCBC noted that any sustained dollar rally would require further evidence of economic resilience in the United States. Without additional upside surprises in upcoming data, the dollar may struggle to extend gains, potentially offering some relief to gold.
US Inflation and Iran Tensions in Focus
Investors are now awaiting key U.S. economic releases for further direction. Consumer Price Index (CPI) data for January is due on Friday and will provide fresh insight into inflation trends. Inflation and labor market conditions remain the Fed’s primary considerations when setting interest rates.
Weekly jobless claims data is also scheduled for release later on Thursday.
Meanwhile, safe-haven demand remains elevated amid ongoing tensions between the U.S. and Iran. Although both sides have signaled progress in recent nuclear talks, Washington is reportedly preparing to deploy a second aircraft carrier to the Middle East.
U.S. President Donald Trump has repeatedly urged Tehran to agree to a deal, and recently met with Israeli President Benjamin Netanyahu, adding to geopolitical uncertainty.
Overall, gold and silver markets remain sensitive to both U.S. economic data and global political developments, with volatility likely to persist in the near term.
