The market reacts: gold prices fall due to a strong dollar and US economic indicators
12 February 14:18
Gold prices fell on Thursday, February 12, after stronger-than-expected US labor market data supported the dollar and reduced expectations of an early interest rate cut by the Federal Reserve.
This was reported by Reuters, according to "Komersant Ukrainian".
Gold prices fell
Gold prices fell on Thursday, February 12, amid a strengthening US dollar after the release of strong January employment data. Investors revised their expectations for an imminent Fed interest rate cut and focused on upcoming macroeconomic reports.
The spot price of gold fell 0.5% to $5,055.24 per ounce as of 06:42 GMT. The metal had risen more than 1% the previous day. US gold futures for April delivery fell 0.4% to $5,077.30 per ounce.
According to OCBC strategist Christopher Wong, a strong US labor market report led to a partial reversal of expectations for a rapid easing of Fed monetary policy, which limited the rise in gold prices.
The US dollar index rose
The US dollar index rose after unexpectedly positive employment data pointed to the resilience of the US economy. The strengthening of the dollar makes gold, denominated in US currency, more expensive for investors from other countries, which puts pressure on demand.
In January, employment growth in the US accelerated and the unemployment rate fell to 4.3%. At the same time, a revision of previous data showed that in 2025, the economy created only 181,000 jobs, which is significantly less than the previously estimated 584,000, somewhat dampening optimism about the state of the labor market.
Analysts also point to fiscal risks: according to the US Congressional Budget Office forecast, the country’s budget deficit will grow to $1.853 trillion in fiscal year 2026, which worsens the overall economic picture.
According to a Reuters poll, the Federal Reserve is likely to keep rates unchanged until the end of Fed Chairman Jerome Powell’s term in May, with the first cut possible as early as June.
Investors are now awaiting weekly unemployment claims data on Thursday and inflation statistics on Friday, which may provide new signals about the Fed’s next moves.
Other metals are also mostly losing value
Among other precious metals, silver fell 0.6% to $83.49 per ounce, after jumping 4% the day before. Platinum lost 1.1%, falling to $2,109.45, while palladium rose 0.3% to $1,705.25 per ounce.
