By Christopher Tahir, Senior Market Strategist at Exness
Gold remained range-bound near the USD 5,000 per ounce mark on Tuesday, reflecting caution ahead of a key macroeconomic calendar. Attention is firmly focused on this week’s nonfarm payrolls report and inflation data, both of which could recalibrate expectations for Federal Reserve policy. Current pricing still points to at least two 25bp rate cuts this year, with the first potentially arriving in June. Better-than-expected data could dampen expectations of a dovish monetary policy and weigh on the precious metal.
Geopolitical risk remains an important pillar underpinning safe-haven demand. In the Middle East, tensions have not fully dissipated despite recent US-Iran talks. In Eastern Europe, hostilities persist, as parties involved step up rearmament efforts, adding to the uncertainty.
On the institutional level, central bank demand remains structurally supportive and gold-backed ETFs saw continued inflows despite a notable outflow of around 30 tonnes in the week ending February 6. This marked the first weekly outflow since late October and the largest since May last year, suggesting some profit-taking after the market’s correction that could limit upside momentum in the near term.