Gold Corrects, Jobless Claims Reinforce High Interest Rate Narrative
Gold prices weakened slightly on Thursday (March 5) after nearing $5,200/ounce earlier in the session, with profit-taking emerging as the US dollar strengthened following the release of US economic data. Spot gold fell 0.4% to US$5,121.05 per ounce at 8:50 a.m. ET (13:59 GMT).
The main pressure came from the strengthening dollar. The dollar index strengthened by about 0.3% to 99.11, supported by a combination of safe-haven demand and repricing interest rate expectations following the US data release.
On the data front, the market just received weekly jobless claims data, which also added to the "labor market remains stable" narrative. Initial jobless claims were unchanged at 213,000 for the week ending February 28 (close to expectations), while continuing claims rose by 46,000 to 1.868 million, indicating that some workers are taking longer to return to work. This data tends to support the dollar through expectations of persistently higher interest rates, which in turn holds back gold.
Despite the correction, gold still benefits from a geopolitical risk premium as the Middle East war enters its sixth day. However, price movements suggest some investors are shifting their positions to cash as volatility increases, rather than a fundamental shift in safe-haven demand.
Among other precious metals, silver fell 1.1% to US$82.618 per ounce, while platinum fell 0.1% to US$2,152.400 per ounce, reflecting weakness in line with the stronger dollar and consolidation following sharp movements in recent days.
Source: Newsmaker.id
