Gold fell nearly 2.7% on Thursday, sliding to $4,945 from a daily high of $5,100 and moving below $4,900. The drop came despite falling US yields and followed solid US labour data.
US Initial Jobless Claims for the week ending February 7 came in at 227K versus 222K expected, and the 4-week average was 219.5K. January Nonfarm Payrolls showed 130K jobs added versus 70K estimated, while the unemployment rate edged down from 4.4% to 4.3%.
Market Repricing After Strong Jobs Data
Swaps pricing reflected a steady-rate view at the Federal Reserve, with markets trimming expectations for a June cut and pricing 30 bps of easing for the July 29 meeting. The US 10-year yield fell by nearly seven basis points to 4.106%, while DXY rose 0.07% to 96.99.
Reports cited renewed nuclear talks between the US and Iran and a possible Russia-Ukraine peace deal, alongside Russia considering a return to US Dollar settlement. US CPI expectations for January were 2.5% YoY headline (from 2.7%) and 2.5% core (from 2.6%).
Technical levels referenced included the 20-day SMA at $4,940, $4,800, and the 50-day SMA at $4,602, with resistance at $5,000 to $5,100. Central banks bought 1,136 tonnes of gold worth around $70 billion in 2022.
We are seeing a familiar pattern emerge today, February 13, 2026, that mirrors the sharp gold sell-off we witnessed around this time in 2025. Last year, strong jobs data and easing geopolitical risks pushed gold down almost 3% despite falling yields. These same factors are reappearing, suggesting caution for those holding long positions.
Just as January 2025’s Nonfarm Payrolls nearly doubled estimates, the most recent report for January 2026 came in hotter than expected at 150,000 jobs, pushing the unemployment rate down to 4.2%. This has traders reconsidering bets for a May rate cut, pushing them out toward the third quarter. The market is remembering how the Federal Reserve held rates steady for longer than anticipated throughout 2025.
Geopolitics Dollar And Near Term Gold Risks
Last year, it was hopes of a deal with Iran and a Russian return to dollar settlements that weakened gold’s safe-haven appeal. Now, renewed diplomatic channels between Washington and Beijing are having a similar effect, reducing the geopolitical risk premium that was built into prices over the last quarter. This de-escalation limits the upside for bullion in the immediate term.
In February 2025, the strong dollar overshadowed falling Treasury yields, a rare dynamic that hurt bullion. We see this again today; even with the 10-year yield easing slightly to 4.05%, the US Dollar Index is firm above 97.00, acting as a major headwind for gold priced in dollars. A strong dollar makes gold more expensive for foreign buyers, dampening demand.
Despite this short-term pressure, we must remember the underlying support from central banks, who have been major buyers. Official data shows they added over 1,000 tonnes in both 2023 and 2024, continuing the trend seen back in 2022 and creating a strong floor for any deep correction. This institutional demand provides a safety net that did not exist to the same extent a decade ago.
For derivative traders, this environment suggests considering put options or put spreads to hedge against a potential drop toward the $4,800 level, a key psychological support tested last year. Selling covered calls against physical holdings could also generate income, as a swift rebound above the $5,000 mark seems unlikely until the market gets more clarity on the Fed’s first rate cut. Any upcoming inflation data, like the CPI report due next week, will be critical in shaping the next move.
