Gold prices declined in European trading on Thursday, pulling back from a two-week high due to correction and profit-taking activity, in addition to pressure from the rebound in the US dollar following strong US labor market data.

Those data reduced the likelihood that the Federal Reserve will cut US interest rates next March. To reprice those expectations, investors are awaiting the release of key US inflation data tomorrow, Friday.

Price Overview

Gold prices today: Gold prices fell by 0.8% to $5,045.23, from an opening level of $5,084.18, and recorded a session high at $5,100.38.

At Wednesday’s settlement, gold prices rose by 1.2% and recorded a two-week high at $5,119.21 per ounce, due to renewed geopolitical tensions between the United States and Iran.

The US Dollar

The dollar index rose by 0.1% on Thursday, continuing attempts to recover from a two-week low, reflecting a rebound in the US currency against a basket of major and secondary currencies.

This rebound comes after the release of strong US labor market data, which reduced the chances of a near-term interest rate cut by the Federal Reserve.

US Interest Rates

The US economy added more jobs than expected last December, with the unemployment rate declining and average hourly earnings rising.

Following those data, and according to the CME FedWatch tool, pricing for keeping US interest rates unchanged at the March meeting rose from 79% to 95%, while pricing for a 25-basis-point rate cut declined from 21% to 5%.

To reprice these expectations, investors are closely monitoring the release of more US economic data, in addition to tracking comments from Federal Reserve officials.

Key US inflation data for January are due tomorrow, Friday, which will provide decisive evidence about the path of US interest rates this year.

Gold Outlook

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said gold retreated from above $5,100 and silver from above $86 after stronger-than-expected US jobs data reduced expectations for an imminent Federal Reserve rate cut, which lifted the dollar.

Hansen added that the renewed focus on incoming economic data points to a form of stabilization after the recent rise in volatility, while the upcoming Lunar New Year holiday in China could weaken risk appetite and liquidity.

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, increased on Wednesday by about 2.0 metric tons, bringing the total to 1,080.32 metric tons, the highest level since February 4.

The British pound declined in European trading on Thursday against a basket of global currencies, extending its losses for the third consecutive day against the US dollar, amid a rebound in the US currency following the release of strong US new jobs data.

Sterling is also pressured by strong expectations that the Bank of England will cut interest rates in March. To reprice those expectations, investors are awaiting important UK economic growth data due later today.

Price Overview

• British pound exchange rate today: The pound fell against the dollar by 0.1% to $1.3616, from the opening level at $1.3629, and recorded a session high at $1.3642.

• The pound lost 0.1% on Wednesday against the dollar, marking its second consecutive daily loss, after the release of strong economic data in the United States.

The US dollar

The dollar index rose on Thursday by 0.1%, within attempts to recover from a two-week low, reflecting improved levels of the US currency against a basket of major and minor currencies.

This rebound comes after the release of strong US labor market data, which reduced the likelihood that the Federal Reserve will cut US interest rates in the near term.

Following the January jobs report and according to the CME FedWatch tool: pricing for keeping US interest rates unchanged at the March meeting rose from 79% to 95%, while pricing for a 25 basis point rate cut fell from 21% to 5%.

UK interest rates

• After the Bank of England meeting last week, traders increased their bets on resuming the monetary policy easing cycle and cutting interest rates.

• Market pricing for the probability that the Bank of England will cut UK interest rates by 25 basis points at the March meeting is currently steady above 60%.

Economic growth

To reprice the above probabilities, investors are waiting later today for UK economic growth data, which is expected to have a strong impact on the Bank of England’s monetary policy path.

At 07:00 GMT, monthly GDP is due, expected to grow by 0.1% in December from 0.3% growth in November. At the same time, the preliminary quarterly GDP reading is expected to show growth of 0.2% in Q4 2025 from 0.1% in Q3.

Expectations for the British pound

We expect here at Economies.com: if UK growth data come in weaker than market expectations, the probability of a Bank of England rate cut in March will rise, leading to further losses in the British pound.

The Japanese yen rose in Asian trading on Thursday against a basket of major and minor currencies, extending its gains for the fourth consecutive day against the US dollar and recording its highest level in two weeks, amid a strong wave of buying driven by easing financial concerns in Japan.

In addition to the shift in focus from spending to growth, traders are betting that the landslide parliamentary election victory of Prime Minister Sanai Takaichi puts her in a strong position to pursue more fiscally responsible policies and gives her greater ability to control downside risks in government bonds.

Price Overview

• Japanese yen exchange rate today: The dollar declined against the yen by 0.6% to ¥152.22, the lowest level since January 28, from today’s opening level at ¥153.22, and recorded a session high at ¥153.44.

• The yen ended Wednesday’s trading higher by about 0.75% against the dollar, marking its third straight daily gain, amid a strong buying wave after the landslide parliamentary election victory of the Liberal Democratic Party led by Prime Minister Sanai Takaichi.

Financial concerns

Takaichi’s landslide victory gave investors greater confidence in her ability to push growth-supportive fiscal policies and ease cost-of-living pressures, while at the same time placing her in a position to use stimulus tools more responsibly.

There is little doubt that Takaichi’s expected adoption of more coherent economic policies will reduce financial concerns and strengthen confidence in the overall economic path, and that stimulus measures will support deficit control and contain public debt growth.

Expectations for the Japanese yen

• Naka Matsuzawa, chief strategist at Nomura Securities in Tokyo, said: “These are purchases by Japanese investors,” as the yen — not the euro — has become the preferred choice for investment outside the United States.

• Yosuke Miyairi, FX and rates strategist at Nomura, said the dollar/yen exchange rate could follow the narrowing interest rate differentials between the United States and Japan and fall toward 150 if investors see Takaichi becoming more fiscally responsible.

Japanese interest rates

• Market pricing for the probability that the Bank of Japan will raise interest rates by a quarter percentage point at the March meeting is currently steady below 10%.

• In order to reprice those probabilities, investors are awaiting further data on inflation, unemployment, and wages in Japan.

Nickel prices rose for the fourth consecutive session on Wednesday after the world’s largest nickel mine in Indonesia received a much lower production quota for this year, increasing supply concerns.

The three-month benchmark nickel contract on the London Metal Exchange climbed 2.1% to $17,860 per metric ton by 10:00 GMT, after touching an earlier gain of 2.8% at $17,980, its highest level since January 30.

French miner Eramet said its PT Weda Bay Nickel project, a joint venture with China’s Tsingshan and Indonesia’s PT Antam, received an initial production quota of 12 million wet metric tons for 2026, down from 32 million wet metric tons in 2025, adding that it will apply for an upward revision of the quota.

After a prolonged period of low prices, nickel has jumped about 18.6% over the past three months and hit its highest level in more than three years on January 25, after Indonesia — the world’s largest producer of nickel ore — pledged to curb supplies.

Nitesh Shah, commodities strategist at WisdomTree, said Indonesia clearly recognizes its pricing power, noting that its control of about 60% of global output makes it more influential than OPEC in the oil market. He added that Jakarta has realized it does not need to overproduce to achieve solid revenues.

Even so, the International Nickel Study Group expects a surplus of 261,000 tons this year, while an LME futures positioning report showed that one party holds a short position in the February contract equal to between 20% and 29% of total open interest.

Other base metals were also supported by the weaker US dollar, which makes dollar-denominated commodities more attractive to holders of other currencies.

Copper rose 1.2% to $13,266.50 per ton as top consumer China prepares for the Lunar New Year holiday. Aluminum gained 1.1% to $3,127.50, zinc added 1.4% to $3,442.50, lead rose 0.6% to $1,985, and tin jumped 2.8% to $50,700 per ton.