Markets await U.S. jobs and inflation data
Gold prices stabilized on Tuesday after briefly dipping earlier in the session, as unexpectedly flat U.S. retail sales data fueled expectations that the Federal Reserve could cut interest rates later this year.
Spot gold was up 0.1% at $5,058.86 per ounce by mid-morning in New York, recovering from an intraday low of $4,985.99. U.S. gold futures for April delivery also rose 0.1% to $5,084.10 per ounce.
Market participants are largely holding positions steady ahead of several key economic releases later this week, which are expected to provide clearer signals on the direction of monetary policy.
Economic data drives rate expectations
U.S. retail sales were unexpectedly flat in December, suggesting consumer spending and overall economic growth may be slowing as the year begins. The weaker data reinforced expectations that the Fed could begin easing policy in 2026.
Traders are currently pricing in two interest rate cuts of 25 basis points each this year. Lower interest rates tend to support gold, as the metal does not yield interest and becomes more attractive when borrowing costs fall.
January’s nonfarm payrolls report is due Wednesday, with economists expecting around 70,000 jobs to have been added. Inflation data, in the form of the Consumer Price Index, is scheduled for release on Friday.
Dollar weakness and global demand support bullion
Analysts say continued softness in the U.S. dollar is providing additional support for gold prices. Geopolitical uncertainty and persistent expectations of looser monetary policy have also helped keep prices elevated above the psychologically important $5,000 level.
White House economic adviser Kevin Hassett said U.S. job growth could slow in coming months due to weaker labor force expansion and rising productivity, reinforcing the view that economic momentum may be moderating.
Meanwhile, demand for gold remains strong globally. In India, investors poured money into gold exchange-traded funds in January as prices surged, with inflows surpassing those into equity funds for the first time, according to industry data.
Other precious metals retreat
Elsewhere in the precious metals market, silver slipped 1.4% to $82.20 an ounce after a sharp rally in the previous session. Platinum fell 0.6% to $2,110.80 per ounce, while palladium declined 0.5% to $1,731.50.
With major economic indicators looming, analysts expect gold prices to remain range-bound in the near term as investors assess whether slowing growth will prompt the Fed to move sooner than expected.
