Gold Holds Firm as Soft US Data Reinforces Rate Cut Expectations

LONDON (February 11) Gold advanced in the Asian morning session as weaker-than-expected U.S. consumption data strengthened the policy backdrop for monetary easing and improved the relative appeal of a non-interest-bearing asset.

US retail sales were unchanged in December, a result that contrasts with expectations for continued momentum in household spending and signals softer demand conditions entering the new year. That outcome has kept attention fixed on upcoming nonfarm payrolls and inflation releases, both of which carry the potential to reshape the timing and scale of Federal Reserve action.

Market pricing continues to indicate at least two 25 bps rate cuts during the year, with the first adjustment possibly arriving in June, reinforcing the macro environment that typically supports gold. Against this backdrop, spot prices rose 0.85% to $5,070 per ounce, reflecting sensitivity to incremental shifts in policy expectations rather than a broad change in risk conditions.

For investors, the near-term trajectory depends on whether forthcoming labor market and price data validate the emerging narrative of moderating growth and contained inflation. A baseline outcome in which employment and inflation gradually soften would sustain expectations for midyear easing and preserve support for gold near current levels.

The principal risk lies in a reacceleration of either wages or consumer prices, which could delay rate cuts and challenge the metal’s recent advance by lifting real yield expectations.

Investing.com