By Antonio Di Giacomo, Senior Market Analyst at XS.com
The price of gold remains firmly above $5,000 per ounce, consolidating above a historic level that reflects persistent demand for safe-haven assets in a global environment marked by economic uncertainty, financial tensions, and shifting expectations regarding monetary policy. Despite recent bouts of volatility, the precious metal has maintained its bullish structure, supported by underlying macroeconomic factors.
One of the main short-term catalysts was the strong U.S. employment report, which exceeded market expectations and reduced the likelihood of a Federal Reserve rate cut in March. This data strengthened the U.S. dollar and initially exerted downward pressure on gold by increasing the opportunity cost of holding non-yielding assets. However, the impact of the labor data has been mixed. While initial jobless claims showed a slight decline, the rise in continuing claims suggests underlying weakness in the labor market. This signal has revived doubts about the sustainability of economic growth, limiting further gains in the dollar and providing additional support for gold.
The market continues to price in the possibility of two rate cuts throughout 2026, a structural factor that remains supportive of the precious metal. Expectations of a less restrictive monetary policy in the medium term reduce the relative attractiveness of dollar-denominated assets, thereby favoring demand for gold as a store of value.
Adding to this backdrop is a more defensive tone in equity markets, where volatility and profit-taking have increased risk aversion. In this context, gold has regained prominence as a financial haven, attracting capital flows during periods of heightened uncertainty surrounding global growth and market stability.
From a technical perspective, the price holding above the $5,000 threshold reinforces the perception of structural strength. Recent pullbacks have been limited and short-lived, suggesting that the market continues to view these levels as a value zone rather than a definitive ceiling.
Investor attention remains focused on upcoming U.S. inflation data, which could redefine expectations regarding the timing of rate cuts. A gradual moderation of inflation would further enhance gold’s appeal, while upside surprises could trigger episodes of increased short-term volatility.
More broadly, gold continues to benefit from an environment characterized by fiscal imbalances, elevated debt levels, and an uncertain transition in global monetary policy. These structural factors continue to position the precious metal as a key tool for diversification and hedging against systemic risks.
In conclusion, gold is consolidating above $5,000 per ounce, amid signs of economic resilience, slowing growth, and heightened financial caution. While recent labor data have reduced expectations for immediate rate cuts, the medium-term outlook for the metal remains favorable, supported by macroeconomic uncertainty, risk aversion, and expectations of a more flexible monetary policy in 2026. In this environment, gold continues to play a central role as a safe-haven asset and a defensive anchor within investment portfolios.