FX.co ★ Gold Extends Downturn

Gold slipped more than 2% to around $4,870 per ounce as a strengthening US Dollar Index and shifting expectations for Federal Reserve policy weakened bullion’s near-term support. The dollar extended its rebound as investors reassessed the interest rate outlook: while January’s softer US inflation reading reinforced expectations for more than one rate cut this year, strong nonfarm payroll gains, solid private-sector hiring, and forecasts of continued GDP growth have diminished the likelihood of an imminent or aggressive easing cycle. This backdrop has sustained US yield differentials and buoyed the dollar, putting additional pressure on dollar-denominated gold prices.

Geopolitical risks—including renewed US–Iran nuclear talks and ongoing negotiations between Russia and Ukraine—continue to provide a safe-haven underpin for gold. However, in the current phase, currency dynamics remain the dominant factor shaping price action.