By Hassan Fawaz, Chairman & Founder of GivTrade
Gold rebounded on Friday following a decline in the previous session, while the market remains exposed to elevated volatility risks. Stronger-than-expected US labor data this week affected sentiment and could continue to weigh on the market as traders keep adjusting monetary policy expectations with every new data release.
Attention now turns to US inflation data due later today. While it is expected to decline slightly, a persistent inflation reading could reduce expectations for interest rate cuts and lift treasury yields, limiting gold’s upside potential as a result. Conversely, renewed signs of disinflation would revive dovish monetary policy expectations and re-anchor support for bullion.
Despite the short-term turbulence, gold could continue to stabilize and return to a clear upside trend over time as the underlying fundamentals remain constructive. Continued central bank accumulation and persistent geopolitical tensions in Eastern Europe and the Middle East provide a durable floor for gold, reinforcing a slightly bullish medium-term outlook.