Central banks are major buyers of gold, having added 1,136 tonnes worth approximately $70 billion in 2022. These purchases primarily came from emerging economies such as China, India, and Turkey.<\/p>\n
Gold’s price often moves inversely to the US Dollar and Treasuries. Its price tends to rise when the dollar depreciates, offering diversification during economic turbulence.<\/p>\n
Geopolitical factors or recession fears can drive gold prices up. Lower interest rates often benefit gold, while higher rates pose challenges. Most price fluctuations are tied to the performance of the US Dollar. A stronger dollar keeps gold prices subdued, whereas a weaker dollar supports a rise in gold prices.<\/p>\n
The gold price is struggling near $4,750 this week, feeling pressure from a strong US Dollar. This situation feels familiar, as we saw a similar dynamic around this time in 2025 when gold dipped towards $4,600. The core issue then, as it is now, is the market’s expectation for Federal Reserve policy.<\/p>\n
Last year, we saw Initial Jobless Claims for early January 2025 come in unexpectedly low at 198,000, which strengthened the dollar. Just yesterday, the data for the week ending January 9, 2026, showed claims holding steady at a robust 205,000. This continued strength in the labor market makes it difficult for the Fed to justify cutting interest rates soon.<\/p>\n
Because gold offers no yield, it competes with assets like US Treasuries for investor money. The latest Non-Farm Payrolls report for December 2025 showed a solid gain of 210,000 jobs. The CME FedWatch Tool now shows traders are pricing in less than a 30% chance of a rate cut before June, pushing Treasury yields higher and gold lower.<\/p>\n
Geopolitical risks, which often boost gold’s safe-haven appeal, also appear to be fading for now. Unlike the tensions with Iran we were watching in early 2025, recent diplomatic talks regarding trade routes in the South China Sea have reduced market anxiety. This calmer global backdrop is removing a key pillar of support for the gold price.<\/p>\n
Despite these headwinds, we must watch the actions of central banks, who have been huge buyers in recent years. The World Gold Council’s latest data for the third quarter of 2025 showed that central banks, particularly in Asia, still added over 250 tonnes to their reserves. This underlying demand could create a floor for the price, preventing a complete collapse.<\/p>\n
Given the strong dollar and high interest rates, traders could consider buying put options to profit from a potential drop towards the $4,700 level. For those who believe a price floor is near, selling out-of-the-money call options or establishing a bear call spread could generate income while limiting upside risk. We should also monitor speeches from Fed officials this week for any change in tone that might shift expectations.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Gold prices dipped as US jobless claims fell and geopolitical tensions eased, strengthening the US Dollar.<\/p>\n","protected":false},"author":62,"featured_media":16977,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39323","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/39323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=39323"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/39323\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16977"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=39323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=39323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=39323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}