Gold prices (XAU/USD) have shown signs of recovery during the early Asian session on Friday, bouncing back as the US Dollar’s rebound loses momentum. The yellow metal is currently trading near $2,024, marking a modest 0.09% increase for the day.
The US Dollar Index (DXY) hovers around 103.40, while the US Treasury yield consolidates its gains, with the 10-year yield standing at 4.14%. The halt in the US Dollar recovery has contributed to gold’s upward movement.
Resilient economic data in the United States, coupled with the Federal Reserve’s (Fed) dovish stance, has weakened expectations of an early rate cut. Despite the probability of interest rate cuts in March hovering around 57%, Fed officials have not shown a clear inclination toward endorsing such a move.
Thursday’s release of US weekly Initial Jobless Claims, which fell to 187K for the week ending January 13 from the previous reading of 203K, outperformed market expectations of 207K. Additionally, the January Philadelphia Fed Manufacturing Survey improved to -10.6 from -12.8 in December. These positive economic indicators align with the narrative of a “tighter-for-longer” Fed stance, potentially lifting the Greenback and putting downward pressure on USD-denominated gold.
Market attention on Friday will turn to the preliminary US Michigan Consumer Sentiment Index and Existing Home Sales. Moreover, speeches by FOMC members M. Daly (San Francisco) and M. Barr (Board of Governors) are scheduled later in the day, adding to the potential market impact.
As gold continues to navigate the dynamic interplay between the US Dollar and economic indicators, investors remain attentive to developments that could shape the precious metal’s trajectory in the near term.*
