The value of gold steadied near the $2,020 per ounce mark on the closing day of the week. However, it remains poised for a weekly descent, influenced by the ascendancy of the dollar and surging Treasury yields. This trend emerged following robust US data and the adoption of a more assertive tone by the Federal Reserve, quelling anticipations of forthcoming interest rate reductions.
Recently unveiled data on Thursday revealed an unexpected dip in US initial jobless claims, registering at 187K—the lowest figure since September of the preceding year. In earlier reports, the data spotlighted a December surge in US retail sales, surpassing initial forecasts.
Simultaneously, Federal Reserve Governor Christopher Waller, in the course of this week, pushed against prevalent expectations of aggressive policy easing. He emphasized that the robustness of the US economy affords policymakers the latitude to proceed “deliberately and cautiously.” The current market sentiment indicates a 57% probability of a Federal Reserve rate cut in March, a decline from the 75% probability registered a mere week ago, as per CME’s FedWatch Tool.
On another front, the European Central Bank conveyed its stance that it is premature to engage in discussions about policy easing, as documented in the minutes of its recent meeting.