Gold prices eased toward $5,030 per ounce on Tuesday, retreating from a more than one-week high reached in the previous session, as investors opted to book profits after the recent rally.
Market focus has now shifted to key US economic releases later this week, particularly the nonfarm payrolls report and inflation data, which are expected to offer clearer signals on the Federal Reserve’s monetary policy trajectory.
Despite the near-term pullback, expectations of easier monetary policy continue to support bullion. Markets are currently pricing in at least two 25-basis-point interest rate cuts this year, reinforcing gold’s appeal in a lower-rate environment.
Official-sector demand remains a key pillar, with the People’s Bank of China extending its gold purchases for a fifteenth consecutive month in January, highlighting continued diversification away from traditional reserve assets.
Meanwhile, geopolitical risks continue to underpin safe-haven demand. Tensions between the United States and Iran remain elevated despite signs of diplomatic engagement, with Washington recently warning US-flagged vessels to avoid Iranian waters, keeping regional uncertainty firmly in focus.
Frequently Asked Questions
Why did gold prices fall toward $5,030 per ounce?
Gold eased as investors booked profits after prices climbed to a more than one-week high in the previous session. The move appears technical rather than driven by a shift in fundamentals.
What key events are markets watching now?
Attention is focused on upcoming US nonfarm payrolls and inflation data, which could shape expectations for the Federal Reserve’s interest rate policy.
How are interest rate expectations affecting gold?
Markets are pricing in at least two 25-basis-point rate cuts this year. Lower interest rates reduce the opportunity cost of holding gold, providing underlying support for prices
Is central bank demand still supporting gold?
Yes. China’s central bank extended its gold purchases for the fifteenth consecutive month in January, signaling continued official-sector demand despite high prices.
How do geopolitical risks influence gold prices?
Ongoing tensions between the US and Iran, including warnings for US-flagged vessels to avoid Iranian waters, are sustaining safe-haven demand and limiting downside risks for gold.
