Key Points
- Spot gold rose 0.6% to $4,949.99 but is down 0.2% for the week
- Thursday’s drop saw gold break below the $5,000 level for the first time in a week
Gold rebounded on Friday, rising 0.6% to $4,949.99 per ounce after falling below the critical $5,000 level in the previous session. U.S. gold futures for April delivery gained 0.4% to $4,968.0.
The rebound follows a steep 3% decline on Thursday, which marked a one-week low and came amid a broader equities selloff that dragged precious metals down with it.
The bounce comes as market attention shifts toward the upcoming U.S. inflation report, which could reshape expectations for monetary policy.
Following strong nonfarm payrolls data earlier this week, the view that the Federal Reserve will hold rates higher for longer has gained traction, pressuring bullion. However, a softer inflation print could rekindle hopes for rate cuts later this year, helping gold regain ground.
CPI in Focus After Strong Jobs Print
Gold’s weakness earlier in the week followed unexpectedly strong labour data, with January’s jobs report showing better-than-expected employment gains.
This has tempered expectations for immediate rate cuts, shifting the first anticipated move by the Fed from May to June, with two 25-basis-point cuts still priced in for 2026.
Investors now await Friday’s CPI report, expected to provide crucial insight into inflation’s path. If core inflation continues to ease, it may support rate-cut expectations and offer a more favourable backdrop for non-yielding assets like gold.
In physical markets, gold flipped to a discount in India for the first time in a month, as price volatility curbed consumer demand. In contrast, Chinese demand remained strong, with buyers active ahead of Lunar New Year celebrations. This divergence reflects broader market hesitancy in regions sensitive to price fluctuations.
Technical Analysis
Gold (XAUUSD) is currently trading at $4953.87, up +31.79 (+0.65%), as prices attempt to stabilise after recent sharp volatility.
The precious metal remains within a consolidation phase following the dramatic rejection from the recent high of $5598.60 earlier this month.
The daily chart shows price action wedged between key moving averages, with the 10-day MA (4935.49) and 20-day MA (4970.65) providing immediate support and resistance respectively.
Meanwhile, the 30-day MA (4827.34) is offering deeper downside protection, suggesting that bulls are still broadly in control unless this level is breached.
Momentum indicators remain mixed. The price is currently trading below the 5-day MA (5008.45), which signals a loss of short-term momentum, while the Bollinger Bands have narrowed slightly—hinting at reduced volatility.
However, elevated volumes suggest ongoing interest and active positioning from traders.
If gold can reclaim the $5000 level convincingly, upside targets may re-emerge at $5157.56, followed by a potential retest of the $5598.60 peak.
On the downside, watch for a break below $4900–$4850 as a signal of bearish intent, which could trigger a move toward $4544.06 support.
Market Implications
Gold’s sharp drop and partial rebound highlight the market’s sensitivity to macro signals. A softer CPI print could reinforce the case for rate cuts and reignite bullish momentum, potentially pushing prices back above $5,050–5,100.
However, if inflation comes in hotter than expected, selling pressure could return and gold may retest the $4,900–4,850 zone.
While the short-term outlook hinges on inflation data, broader drivers like geopolitical tensions, central bank demand, and fiscal uncertainty remain intact.
For now, the market awaits the next directional cue from incoming data.
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