FX.co ★ Gold Pares Weekly Losses

Gold climbed toward $4,990 per ounce on Friday, extending its rebound and trimming weekly losses after a drop of more than 3% on Thursday. The recovery came as softer-than-expected US inflation data eased pressure on Treasury yields and weighed on the dollar. The previous session’s sharp decline had coincided with a broad cross-asset selloff, prompting investors to liquidate precious metals to raise cash, while simultaneous declines in equities and cryptocurrencies highlighted a broader risk-off shift.

Data showed that annual US inflation slowed to 2.4% in January, below market expectations, while core inflation eased to 2.5%. The figures strengthened the dovish camp within the Federal Reserve, after earlier robust labor market data had pushed market expectations for the first interest rate cut toward July. Following the inflation release, Treasury yields edged lower and the dollar softened, providing near-term support for bullion.

Despite the recent volatility, structural demand for gold remains underpinned by continued central bank purchases, ongoing geopolitical tensions, and persistent concerns about currency debasement and mounting sovereign debt burdens.