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Spot gold dipped 0.1% to $2,659.39 per ounce as of 0527 GMT.
However, US gold futures rose 0.2% to $2,678 per ounce.
In India, gold prices moved higher.
The cost of 24-carat gold rose by ₹130 to ₹7,900.3 per gram.
Meanwhile, 22-carat gold increased by ₹120 to ₹7,243.3 per gram.
Market trends and drivers
Gold’s rally earlier this week was fueled by weaker-than-expected US private employment data. The report raised hopes that the Federal Reserve might ease its rate hike stance this year.
“Prices are trading in a narrow range, and there is some profit-booking in place. A new trigger is needed for gold to breach its resistance,” said Ajay Kedia, Director at Kedia Commodities.
China’s central bank also contributed to the rally. It increased its gold reserves for a second consecutive month in December, rising to 73.29 million fine troy ounces.
This marked renewed demand for bullion after a six-month pause.
However, positive US economic data tempered gold’s gains. November’s job openings climbed to 8.098 million, while December’s ISM Services PMI surged to 54.1, indicating robust economic activity.
These figures strengthened the US dollar and treasury yields, weighing on gold.
Inflation and policy expectations
The Federal Reserve minutes released on Wednesday (January 8) highlighted concerns about persistent inflation. Policymakers noted that rising prices and potential trade policy changes could delay easing measures.
Bullion remains a favored hedge against inflation, but high interest rates diminish its appeal as a non-yielding asset.
“While gold’s momentum may carry it higher in early 2025, a combination of physical and financial market factors may drive prices moderately lower by the end of the year,” HSBC noted in a report.
ETF inflows signal renewed interest
Physically-backed gold exchange-traded funds (ETFs) saw their first inflows in four years, according to the World Gold Council.
This signals a shift in investor sentiment toward safe-haven assets amid geopolitical and economic uncertainties.
What lies ahead
The US jobs report is expected to be a key market driver.
“Persistent inflation risks and delayed Fed rate cuts could keep traders cautious,” said Kaynat Chainwala, AVP-Commodity Research at Kotak Securities.
While short-term gains appear possible, traders are likely to adopt a wait-and-see approach in anticipation of clearer economic signals.
–With agencies inputs
