Below $4,600: Gold Loses Steam
Gold prices (XAU/USD) continued their decline for the second straight day on Friday, falling to around $4,590 and moving below $4,600. This correction occurred after the market began to reduce defensive positions as geopolitical tensions regarding Iran temporarily eased.
Safe-haven demand weakened after US President Donald Trump signaled he could delay military action, following Iran's alleged promise not to execute protesters. Sentiment was also calmer due to reports that Israel and several regional allies were urging the US to refrain from attacking in the near future.
From a macro perspective, gold was also under pressure as US employment data reinforced the case for the Fed to hold interest rates. US initial jobless claims unexpectedly fell to 198,000 (below the 215,000 forecast), reinforcing the view that the labor market remains quite solid despite high borrowing costs.
The previous data series also made the market more cautious about locking in expectations of an interest rate cut: US retail sales rose 0.6%, while annual PPI (headline and core) hovered around 3%—a combination that made a quick rate cut seem less urgent. As a result, the interest rate contract market has largely shifted its expectations for the next rate cut to June or later.
Risk sentiment was also boosted after Trump said he had no plans to fire Fed Chairman Jerome Powell, which helped ease market concerns about the central bank's independence. The dollar itself has tended to stabilize around 99.3, so pressure on gold is coming more from reduced safe-haven demand and changing interest rate expectations.
Technically, gold's weakness indicates that the rally momentum is starting to weaken after hitting a record high around $4,643. If the pressure continues, the market will test the nearest support area around $4,550, then $4,520. Conversely, to return to bullishness, gold needs to reclaim the $4,600 area and break through the previous record zone.
5 key points:
- Gold falls to ~$4,590, back below $4,600
- Iran tensions ease → demand for safe havens weakens
- Jobless claims of 198,000 boost expectations of the Fed holding interest rates
- US data (retail sales & PPI) prompts the market to shift the rate cut to June. (asd)
Source: Newsmaker.id
