Gold prices rallied strongly in Monday's session, climbing 1.9% to $5,056.21 per ounce and solidifying a position above the psychologically significant $5,000 level. The move was primarily fueled by a 0.8% decline in the U.S. dollar index, which fell to 96.83. Analysts pointed to the currency's weakness as a key driver for the precious metal's gains.
Central Bank Demand Provides Structural Support
Underpinning the market is continued robust official-sector buying. The People's Bank of China added to its gold reserves for a fifteenth consecutive month in January, raising its holdings to 74.19 million fine troy ounces. The value of its reported reserves increased to approximately $369.58 billion. This persistent demand from central banks is seen by market participants as establishing a durable floor for prices.
Meanwhile, silver dramatically outperformed, jumping 6.3% to $82.86 per ounce. Platinum and palladium also registered gains during the session.
All Eyes on Delayed U.S. Data
The immediate focus for traders is a pair of delayed U.S. economic releases. The January nonfarm payrolls report is scheduled for February 11, followed by the Consumer Price Index (CPI) data for January on February 13. These figures are critical for shaping expectations around the timing of the Federal Reserve's first interest rate cut of the year, which markets are currently anticipating in June.
Gold, which pays no interest, becomes more attractive when rates are expected to fall, as the opportunity cost of holding it decreases. Consequently, any upside surprises in the jobs or inflation data could pressure bullion by boosting Treasury yields and the dollar.
The rally demonstrates the metal's sensitivity to shifting macroeconomic forecasts. While speculative flows can cause volatility, the consistent bid from official buyers appears to be providing a new foundational layer of demand for the market.
