Gold prices bounced back on Friday after slipping to a near one-week low, as investors turned their attention to upcoming US inflation data. The recovery comes amid heightened market volatility and shifting expectations around Federal Reserve interest rate decisions.
Spot gold climbed 0.6% to $4,949.99 per ounce, recovering from Thursday’s sharp decline. However, the metal still posted a modest weekly loss of 0.2%. Meanwhile, US gold futures for April delivery rose 0.4% to $4,968 per ounce.
Why Did Gold Fall Below $5,000?
On Thursday, gold dropped nearly 3%, breaking below the key psychological support level of $5,000 per ounce. Selling pressure intensified after a sharp rout in equities markets.
Market analysts note that large price levels often act as technical triggers. Once broken, they can accelerate price movements as traders adjust positions quickly.
Adding to the pressure, strong US jobs data earlier this week reinforced expectations that the Federal Reserve may keep interest rates higher for longer. Higher interest rates typically reduce the appeal of non-yielding assets like gold.
Inflation Data Now in Focus
Investors now await crucial US inflation figures for clearer signals about the Federal Reserve’s policy path. Current market pricing suggests two 25-basis-point rate cuts in 2026, with the first expected in June.
Gold generally performs well in lower interest rate environments because it does not offer yield. If inflation moderates and rate cuts move forward, bullion could regain upward momentum.
Global Market Trends Impacting Gold
Beyond US data, global developments also shaped gold’s movement:
- Asian markets retreated from record highs, especially in the technology sector.
- In India, gold shifted to a discount for the first time in a month due to subdued demand and volatile pricing.
- In China, demand remained strong ahead of Lunar New Year celebrations.
These mixed signals highlight the delicate balance between investor sentiment, physical demand, and macroeconomic indicators.
Performance of Other Precious Metals
Other precious metals also experienced volatility:
- Silver rose 1.5% to $76.31 per ounce, rebounding from an 11% drop but still heading toward a weekly loss.
- Platinum gained 0.9% to $2,018.44 per ounce.
- Palladium climbed 2.2% to $1,652.31.
Despite Friday’s gains, both platinum and palladium remained on track for weekly declines.
What’s Next for Gold?
The direction of gold prices now depends heavily on inflation data and the Federal Reserve’s response. If inflation cools, gold could regain strength as rate cut expectations solidify. However, continued economic resilience may keep pressure on prices.
For now, gold remains near a critical technical zone just below $5,000, with volatility likely to persist in the short term.
