- Gold recovers from the fall to $2,735 as US jobless claims increase due to temporary factors.
- The US Dollar Index falls slightly, boosting Gold as markets await rate decisions from major central banks.
- Geopolitical events and central bank actions will drive markets; BoJ expected to raise rates, ECB likely to cut rates.
Gold price holds firm after sliding to a daily low of $2,735 amid elevated US Treasury yields. United States (US) economic data showed the labor market is cooling, as market participants continued to digest President Trump’s trade policy rhetoric. XAU/USD is trading at $2,755, virtually unchanged.
Bullion prices are expected to finish the week with solid gains despite paring some of their gains on Thursday.
Data from the U.S. Department of Labor revealed that more Americans filed for unemployment benefits during the week ending Jan. 18, which would generally indicate a weakening labor market. However, the report showed that climate distortions and the fire in Los Angeles are the main reasons for this and will likely be reflected in subsequent publications.
The last stretch of the yellow metal’s rise was sponsored by the fall of the Dollar. According to the US Dollar Index (DXY), which measures the performance of the Dollar against a basket of six peers and is generally inversely correlated with Gold, it fell 0.08% to 108.06.
On Friday, the central bank bonanza begins with the Bank of Japan (BoJ) expected to raise rates by 25 basis points (bps). Next week, the Federal Reserve (Fed) and the European Central Bank (ECB) are on the agenda, with the former projected to keep rates unchanged while the ECB is expected to reduce borrowing costs by 25 bps.
This week, the US economic agenda will include S&P Global Flash PMIs, housing data and the final release of the University of Michigan (UoM) Consumer Sentiment for January.
Daily Market Summary: Gold price consolidates above $2,750 on modest employment data
- Gold prices rose as real yields remained unchanged on Thursday. Measured by 10-year Treasury Inflation Protected Securities (TIPS), the yield stands at 2.19%.
- The yield on the 10-year US Treasury bond rises four bps during the day to 4.637%, putting a limit on Gold’s advance.
- US Initial Jobless Claims for the week ending January 18 increased by 223,000, from 217,000 in the previous release and above estimates of 220,000. The 4-week average of jobless claims rose from 212,750 to 213,500 for the first time in five months.
- A Reuters report revealed that US President Trump confirmed that universal tariffs on all imports to the US are also under consideration and will come at a later stage.
- Market participants are pricing in roughly equal odds that the Fed will cut rates twice by the end of 2025, with the first reduction occurring in June.
XAU/USD Technical Outlook: Pause in Gold Price Advance, Bulls Target $2,790
Gold prices consolidate near $2,750 as traders take profits ahead of the Fed’s monetary policy decision next week. If the Fed keeps rates unchanged, it would be the first time the bank has paused, which would be detrimental to bullion buyers.
Despite this, a sharp rise in inflation could trigger a buying spree in the non-yielding metal, pushing prices higher. In that case, if XAU/USD breaks the all-time high (ATH) at $2,790, the next target is the $2,800 mark. Once broken, key psychological levels at $2,850 and $2,900 would be exposed.
On the downside, if the bears drag bullion prices below the $2,750 figure, the 50-day and 100-day SMA emerge as support levels, each at $2,651 and $2,640. If they are broken, the next level is the 200-day SMA at $2,515.
economic indicator
Weekly unemployment benefit requests
Weekly unemployment benefit applications are published by the US Department of Labor and is a measure of the number of people who have filed their first claim for unemployment insurance. In other words, it provides a measure of strength in the labor market. A higher-than-anticipated number indicates weakness in the labor market, which influences the strength and direction of U.S. economic activity. In this way, a lower than expected reading is bullish for the dollar.
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Last post:
Thu Jan 23, 2025 1:30 p.m.
Frequency:
Weekly
Current:
223K
Dear:
220K
Previous:
217K
Fountain:
US Department of Labor
Every Thursday, the US Department of Labor releases the number of initial claims for unemployment benefits for the previous week in the US. Since this reading could be very volatile, investors may want to pay more attention to the average four weeks. A bearish trend is considered a sign of an improving labor market and could have a positive impact on the performance of the USD against its rivals and vice versa.
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.