Gold traded near $5,060 on Thursday, staying in the $5,000–$5,100 range. It held above $5,000 even as expectations for early US rate cuts faded, while demand for safe assets stayed strong.
US Nonfarm Payrolls rose by 130K in January, beating the 70K forecast and marking the strongest gain since December 2024. The unemployment rate slipped to 4.3% from 4.4%. This supports the view that the Federal Reserve may keep rates steady in the near term.
Dollar And Yields Cap Pressure
After the report, the US Dollar and Treasury yields did not keep rising. That helped reduce pressure on gold. The US Dollar Index (DXY) traded near 96.80, close to one-week lows.
Kansas City Fed President Jeffrey Schmid warned that rate cuts could keep inflation higher for longer, with inflation still near 3%. Cleveland Fed President Beth Hammack said the funds rate is “right around neutral” and supported staying on hold.
Markets still expect about 50 basis points of rate cuts this year, with the first cut most likely in June or July, according to CME FedWatch. Attention now shifts to US CPI on Friday.
US-Iran tensions also remained high, with reports of plans to deploy a second US aircraft-carrier strike group to the Middle East. Technical signals point to weaker momentum: RSI is near 55 and ADX is near 8. Key support sits near $5,000 and then $4,850, while resistance stands at $5,100.
Range Bound Setup And Strategy
Gold remains stuck in a tight range. It has struggled to move above $5,100, while buyers have defended the $5,000 area. Strong January job data has reduced hopes for quick Fed rate cuts, which limits upside. At the same time, US-Iran tensions continue to support prices through safe-haven demand.
Recent data supports this cautious tone. Last week’s January jobs report showed 225,000 new jobs, keeping unemployment low at 3.6%. Meanwhile, the latest Consumer Price Index held firm at 3.2% year over year. Together, solid growth and sticky inflation give the Fed little reason to cut rates quickly. This backdrop supports a “higher for longer” policy approach.
For derivatives traders, selling volatility may make sense in the short term. With gold pinned in a narrow band, options strategies that benefit from limited movement—such as selling straddles or strangles around $5,050—may earn income as premiums decay. The low volatility shown by the technical indicators supports this view, at least until the next major data release.
Still, traders should watch next week’s Producer Price Index (PPI) and retail sales. In 2025, surprise inflation prints triggered sharp breakouts more than once. A hotter-than-expected PPI could push gold below $5,000, while a cooler print could help gold break above $5,100.
Geopolitical risk also remains a key wildcard. That makes longer-dated, out-of-the-money call options a useful hedge against a sudden escalation. The late-2025 Strait of Hormuz incident is a reminder: gold jumped nearly 4% in one session. Holding low-cost upside protection may be sensible while tensions remain elevated.
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