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Gold prices tumbled nearly 2% on Thursday, retreating to $4,880 per ounce as the US Dollar regained strength and investors booked profits. Despite weak US labor data suggesting a softening job market, the Dollar remained resilient, putting pressure on precious metals.
Market Sentiment and Central Bank Signals
The market’s reaction reflects a cautious sentiment among traders. While recent economic reports indicated slower hiring and rising layoffs, investors focused on the Greenback’s strength, which weighed on gold. Central bank policies also played a role: the European Central Bank kept rates steady, and the Bank of England signaled possible rate cuts in the near future, adding to market uncertainty.
Short-Term Momentum Looks Fragile
Gold’s short-term momentum appears fragile. The uptrend continues on the daily chart, but buyers are hesitant, and any sustained decline could push prices toward the $4,800 support level. Analysts note that a recovery above $4,900 would be needed for gold to regain upward momentum and challenge higher targets around $5,000.
Gold Remains a Safe-Haven Asset
Despite the pullback, gold remains a key safe-haven asset. Its historical role as a store of value and hedge against inflation keeps it relevant for investors seeking protection during turbulent markets. However, in the immediate term, the metal is vulnerable to further declines if the US Dollar maintains its strength and investor caution persists.
