Gold retreats from record as Powell dampens rate cut hopes
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Gold Pulls Back as Fed Signals Caution on Rate Cuts
Gold prices slipped from record highs after Federal Reserve Chair Jerome Powell reaffirmed a patient approach to interest rate cuts, reinforcing expectations that policy easing will be slower than markets had hoped. Spot gold dipped after reaching an all-time high of $2,942.70, as investors took profits ahead of today’s U.S. CPI release. U.S. gold futures also eased, reflecting a cooling of immediate bullish momentum. Despite the pullback, uncertainty surrounding inflation, Fed policy, and trade tensions continues to support the broader uptrend in gold, with safe-haven demand still intact.
Powell’s Comments & Market Implications
The Fed Chair reiterated that while the economy remains in a good place, policymakers see no rush to cut rates. He left the door open for easing only if inflation declines further or the labor market weakens, suggesting that traders should temper expectations for near-term Fed action. With bullion acting as an inflation hedge, higher-for-longer interest rates may weigh on short-term demand. However, Powell’s neutral stance and ongoing geopolitical risks suggest gold’s longer-term bullish case remains intact.
CPI Data in Focus as Next Major Catalyst
Investors are now awaiting the U.S. Consumer Price Index (CPI) release, which is expected to show a 0.3% increase in January, following 0.4% in December. A stronger-than-expected print could push Treasury yields and the dollar higher, adding pressure to gold. However, if CPI comes in weaker than expected, traders could reignite rate-cut speculation, providing support for bullion. The Producer Price Index (PPI) on Thursday will also be closely watched, with further implications for inflation expectations.
Gold’s Safe-Haven Demand Still Intact
Despite the profit-taking, uncertainty surrounding Trump’s planned 25% tariffs on steel and aluminum imports is keeping safe-haven demand for gold elevated. The threat of additional retaliatory trade measures from Canada and other countries could fuel further risk aversion, underpinning the metal’s long-term uptrend.
Strategic Outlook for Precious Metals
Gold’s bullish trajectory remains intact, though short-term volatility is expected as traders react to economic data and Fed signals. CPI impact on gold pricing – A hotter-than-expected CPI print could strengthen the dollar and push Treasury yields higher, pressuring gold. A softer print could support bullion by reviving rate cut bets. Key technical levels – Gold is testing short-term support around $2,890, with further downside risk toward $2,850 if CPI beats expectations. A break above $2,920 could signal a renewed attempt at record highs. Silver and platinum tracking gold’s moves – Silver remains resilient near $31.90, while platinum and palladium are holding gains as industrial demand factors into price action.
Gold prices slipped from record highs after Federal Reserve Chair Jerome Powell reaffirmed a patient approach to interest rate cuts, reinforcing expectations that policy easing will be slower than markets had hoped. Spot gold dipped after reaching an all-time high of $2,942.70, as investors took profits ahead of today’s U.S. CPI release. U.S. gold futures also eased, reflecting a cooling of immediate bullish momentum. Despite the pullback, uncertainty surrounding inflation, Fed policy, and trade tensions continues to support the broader uptrend in gold, with safe-haven demand still intact.
Powell’s Comments & Market Implications
The Fed Chair reiterated that while the economy remains in a good place, policymakers see no rush to cut rates. He left the door open for easing only if inflation declines further or the labor market weakens, suggesting that traders should temper expectations for near-term Fed action. With bullion acting as an inflation hedge, higher-for-longer interest rates may weigh on short-term demand. However, Powell’s neutral stance and ongoing geopolitical risks suggest gold’s longer-term bullish case remains intact.
CPI Data in Focus as Next Major Catalyst
Investors are now awaiting the U.S. Consumer Price Index (CPI) release, which is expected to show a 0.3% increase in January, following 0.4% in December. A stronger-than-expected print could push Treasury yields and the dollar higher, adding pressure to gold. However, if CPI comes in weaker than expected, traders could reignite rate-cut speculation, providing support for bullion. The Producer Price Index (PPI) on Thursday will also be closely watched, with further implications for inflation expectations.
Gold’s Safe-Haven Demand Still Intact
Despite the profit-taking, uncertainty surrounding Trump’s planned 25% tariffs on steel and aluminum imports is keeping safe-haven demand for gold elevated. The threat of additional retaliatory trade measures from Canada and other countries could fuel further risk aversion, underpinning the metal’s long-term uptrend.
Strategic Outlook for Precious Metals
Gold’s bullish trajectory remains intact, though short-term volatility is expected as traders react to economic data and Fed signals. CPI impact on gold pricing – A hotter-than-expected CPI print could strengthen the dollar and push Treasury yields higher, pressuring gold. A softer print could support bullion by reviving rate cut bets. Key technical levels – Gold is testing short-term support around $2,890, with further downside risk toward $2,850 if CPI beats expectations. A break above $2,920 could signal a renewed attempt at record highs. Silver and platinum tracking gold’s moves – Silver remains resilient near $31.90, while platinum and palladium are holding gains as industrial demand factors into price action.