Gold is on track for its first back-to-back weekly decline in over two months amid concerns that the Federal Reserve may delay interest rate cuts due to persistent inflation risks.
Investors are eagerly awaiting the release of the monthly US jobs data later on Friday to gain further insight into the health of the economy. A report on Thursday revealed a sharp increase in labor costs over the past year, coupled with a slowdown in productivity gains, fueling inflation concerns. Federal Reserve Chair Jerome Powell’s comments on Wednesday suggested that policymakers are cautious about lowering borrowing costs until they see clear signs of a slowdown in price increases.
Implications for Gold Investors
Gold prices are sensitive to changes in interest rates and inflation expectations. If the Federal Reserve decides to hold off on rate cuts due to inflation concerns, this could put downward pressure on gold prices in the short term. Investors in the gold market should closely monitor economic data releases and Federal Reserve statements for signals on future monetary policy decisions.
