Gold Surges Past $5,000 as US Inflation Fuels Fed Rate-Cut Bets

Gold prices reclaimed the $5,000 mark on Friday after a softer-than-expected US inflation report reignited speculation that the Federal Reserve could ease rates. XAU/USD jumped nearly 2%, trimming Thursday’s losses and signaling renewed bullish momentum.


US Inflation Cools: CPI Hits 2.4%

The US Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 2.4% year-over-year in January, below the expected 2.5% and down from 2.7% in December. Core CPI, which excludes food and energy, remained steady at 2.5%, aligning with forecasts.
The data provides fresh hope for disinflation, even as the labor market shows strength—January added over 130,000 jobs and unemployment fell to 4.3%.


Market Reaction: Buyers Step In at $4,950

Gold initially tested the $5,000 threshold before retreating slightly, giving investors an opportunity to buy the dip around $4,950. The yellow metal quickly regained momentum, closing near its daily high.

Lower US Treasury yields and a weaker dollar have further supported the rally. The 10-year Treasury yield fell 14 basis points this week to 4.06%, while the US Dollar Index (DXY) is down 0.85% for the week at 96.84.


Fed Watch: June Rate Cut Odds Rise

Money markets are now pricing a 55% chance of a 25-basis-point rate cut by June, as traders await FOMC Minutes, Core PCE data, and speeches from Fed officials. Most Federal Reserve policymakers, led by Jerome Powell, remain on hold, but expectations could shift under incoming chair Kevin Warsh in May.