Gold regained momentum on Friday, climbing more than 2% after softer-than-expected U.S. inflation data renewed expectations of Federal Reserve rate cuts later this year. The rally reversed losses from the previous session, when prices slid sharply following strong employment numbers.
Spot gold rose 2.25% to $5,030.45 per ounce as of 4:01 p.m. ET. Just a day earlier, bullion had dropped nearly 3%, marking its lowest level in almost a week. U.S. gold futures for April delivery also advanced, gaining 2% to settle at $5,050.80 per ounce.
Tai Wong, an independent metals trader, noted that gold and silver were benefiting from a relief rally. According to Wong, a mild January Consumer Price Index (CPI) reading eased concerns triggered by Wednesday’s strong employment report.
CPI Data Eases Market Jitters
Fresh data from the Labor Department showed the U.S. Consumer Price Index increased 0.2% in January. Economists had expected a 0.3% rise. December’s figure remained unrevised at 0.3%. The lighter inflation print shifted sentiment quickly.
Market participants now anticipate a total of 63 basis points in rate cuts this year, with the first move expected in July, based on data compiled by LSEG. Since gold does not yield interest, it typically performs well when interest rates fall.
At the same time, labor market data painted a different picture. The United States added 130,000 jobs in January, far above analysts’ estimates of 70,000. Strong hiring had initially pressured gold earlier in the week.
Silver and Other Metals React
Spot silver rose 2.29% to $76.88 an ounce, recovering part of the 11% slide recorded in the previous session.
Other precious metals followed:
– Spot platinum gained 3% to $2,059.90 per ounce
– Palladium added 4.66% to $1,692.12
Even with Friday’s bounce, platinum and palladium were still headed toward weekly declines.
On the demand side, China’s gold buying stayed firm ahead of the Lunar New Year. India’s market moved in the opposite direction, with discounts emerging. ANZ analysts boosted their second-quarter gold projection to $5,800 per ounce from $5,400, citing persistent demand for gold as a hedge. They warned, however, that silver’s rally could moderate if industrial purchasers push back on pricing.
Gold’s swift rebound shows how inflation readings can quickly alter market psychology. Strong job growth triggered turbulence, but softer CPI data revived rate-cut hopes.
With each new economic release, gold reflects changing assumptions about monetary policy, inflation trends, and cross-border demand.
