Gold prices slipped slightly below $5,050 per ounce on Tuesday but remained near a one-week high, as markets waited for key US economic data that could shape the Federal Reserve’s monetary policy path.
Investors are focusing on the nonfarm payrolls report due Wednesday and inflation figures scheduled for Friday, both seen as critical indicators for the direction of interest rates this year.
White House economic adviser Kevin Hassett noted on Monday that US job growth is likely to slow in the coming months, citing population trends. Slower employment growth could reinforce expectations of easier monetary policy, with markets currently pricing in at least two rate cuts for 2026.
The prospect of lower interest rates has generally supported demand for bullion as a safe-haven asset.
Official-sector demand for gold also continues to underpin the market. China’s central bank extended its state-backed purchases into January, marking the fifteenth consecutive month of acquisitions. Such steady demand from central banks adds a structural layer of support to global gold prices, analysts say.
Geopolitical tensions are further bolstering bullion as a safe-haven asset. Relations between the US and Iran remain tense despite reports of constructive talks last week in Oman.
On Monday, Washington issued a warning to all American-flagged vessels to avoid Iranian waters while transiting the Strait of Hormuz, a key shipping lane for crude oil and other commodities. Such developments have heightened investor caution and kept interest in gold elevated.
Despite the minor retreat on Tuesday, market observers say the combination of looming US economic data, continued official-sector buying, and geopolitical uncertainty has helped gold maintain recent gains.
Traders are expected to remain attentive to upcoming economic releases and any shifts in global risk sentiment, which could influence short-term price movements.
