What happened to gold prices?

Gold prices rose during Asian trading on Friday to reach around $4,995 per ounce, after the yellow metal suffered losses of more than 3% in the previous session, amid sharp fluctuations in global markets.

This recovery came after a strong sell-off on Thursday that prompted investors to liquidate their positions in precious metals to provide liquidity, coinciding with a broad decline in stock and cryptocurrency markets,

indicating a general aversion to risk.

Sell-off puts pressure on markets

There was no specific catalyst behind the sharp decline, but simultaneous declines in several asset classes reflect widespread selling pressure.

Gold is often subject to such short-term movements when investors seek to cover their losses or boost cash liquidity.

Nevertheless, gold remains one of the most prominent safe havens in the medium and long term, especially in times of economic uncertainty.

US inflation data in focus

Markets are turning their attention today to the release of US inflation data (consumer price index), which could play a decisive role in determining the future course of monetary policy.

US jobs data for January, released earlier this week, came in stronger than expected, prompting investors to postpone expectations of the first interest rate cut from June to July.

If inflation data shows a significant slowdown, bets on interest rate cuts could return strongly, which could support gold prices.

If inflation remains high, pressure on the yellow metal could renew.

Factors supporting gold despite volatility

Despite recent volatility, several key factors continue to support the strength of the yellow metal in the medium to long term:

- Currency depreciation concerns: Fiat currencies remain under pressure amid expansionary monetary policies.

- Central bank purchases: Central banks around the world continue to diversify their reserves and increase their gold holdings.

- Geopolitical tensions: International conflicts and political instability continue to reinforce gold's appeal as a safe haven.

- Inflation risks: Despite easing inflationary pressures, risks remain.

- Safe-haven investment demand.

Gold price outlook

Gold is currently being driven by two main factors:

- Strong economic data may delay interest rate cuts

- Economic and geopolitical risks are supporting demand for safe havens

The path of US inflation is likely to determine the near-term direction of gold prices.