Gold prices experienced a downturn following the release of robust US jobs data, which tempered expectations for swift interest rate cuts by the Federal Reserve. Bullion initially fell as much as 0.8 per cent on Thursday, partially offsetting a 1.2 per cent gain from the previous session. January’s US payroll figures revealed the largest increase in over a year, coupled with an unexpected drop in the unemployment rate, indicating ongoing stabilisation in the American labour market at the start of 2026.
The encouraging data may solidify the Federal Reserve’s stance of maintaining current interest rates, leading many traders to adjust their forecasts for the next rate cut from June to July. Lower interest rates typically benefit precious metals like gold, as these assets do not offer interest payments.
Despite the initial losses on Thursday, gold remained above $US5000 an ounce, recovering approximately half of the losses incurred during a significant downturn earlier in the month. Gold had previously surged to a record high above $US5595 an ounce in late January, driven by speculative buying, before experiencing a sharp decline of around 13 per cent over two sessions.
Several financial institutions anticipate a resumption of the gold rally, citing ongoing geopolitical instability, challenges to the Federal Reserve’s independence, and a shift away from traditional assets as key supporting factors. BNP Paribas forecasts gold reaching $6,000 by year-end, with Deutsche Bank and Goldman Sachs also holding positive outlooks. Spot gold was down 0.5 per cent to $US5061.73 an ounce as of 9.59am in Singapore.
