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Gold prices retreat on Thursday amid a de-escalation of US President Donald Trump’s rhetoric over Iran. Also, solid jobs data in the US prompted investors to trim Federal Reserve (Fed) rate cut bets. At the time of writing, XAU/USD trades at $4,609.

Bullion eases as easing geopolitical tensions and strong US data lift risk appetite and support the Dollar

Risk appetite improved on Thursday, sponsored by a recovery of global equities, along with Trump’s delaying an attack on Iran after he was briefed by sources “on the other side” that Tehran would stop killing people involved in the protests, reported Bloomberg. When asked about a military action, he said that he would “watch it” and see how the process evolves.

Trump added that he does not plan to fire the Fed Chair Jerome Powell, despite the Department of Justice's (DOJ) investigation over the Fed building renovations.

Economic data proves that the US economy remains solid following the release of jobless claims data for the last week. This, along with solid regional manufacturing surveys revealed by the New York and Philadelphia Fed, reassured the markets that the US economy is in a no-firing, no-hiring environment.

Money markets had priced in 47 basis points of rate cuts by the Fed towards the year’s end, as revealed by the Prime Market Terminal Interest rate probability tool.

(Click on image to enlarge)

Source: Prime Market Terminal

Recently, Fed officials crossed the wires, led by Regional Fed Presidents Raphael Bostic and Austan Goolsbee, who spoke earlier in the day.

Ahead, the US economic docket will feature Industrial Production and speeches by Fed Governors Michelle Bowman and Philip Jefferson.

Daily digest market movers: A strong US Dollar weakens Bullion prices

• Initial Jobless Claims for the week ending January 10 were solid, with the number of Americans applying for unemployment insurance dipping from 207K to 198K, below the 215K projected.
• Meanwhile, manufacturing activity is improving according to the New York and Philadelphia Fed Banks. The New York Empire State Manufacturing Index for January improved from -3.7 to 7.7. The Philadelphia Fed Manufacturing Survey for the same period exceeded estimates of -2, jumping sharply by 12.6.
• The Greenback staged a rally after the data release, surging to a new yearly high as depicted by the US Dollar Index (DXY). The DXY, which tracks the performance of the American currency versus six peers, is up 0.33% to 99.38. US Treasury yields are recovering some ground, with the 10-year T-note yield up one and a half basis points to 4.152%.
• Fed officials weighed in. Kansas City Fed Jeffrey Schmid said that monetary policy is not very restrictive and added that there shouldn’t be room for complacency on inflation. San Francisco Fed Mary Daly said that she expects solid growth and that policy is in a good place.
• Richmond Fed Thomas Barkin commented that inflation remains elevated, while the jobs market has shown signs of stabilizing. Earlier, Atlanta Fed President Raphael Bostic said he expects economic growth to run above 2%, but warned that inflation pressures are likely to persist, requiring a restrictive policy stance. Chicago Fed President Austan Goolsbee said the jobless claims data was not surprising, reiterating that the Fed’s primary objective remains bringing inflation back to 2%.

Technical analysis: Gold price retreats towards $4,600

Gold’s uptrend remains intact despite retreating somewhat, providing a respite for bulls, due to the overextended move that began towards the end of 2025 at around $4,300, for a more than $300 run towards all-time highs.

For a bullish continuation, XAU/USD needs to clear Wednesday's record high of $4,643 to confirm the bullish bias, which opens the door to challenge $4,650 and $4,700. Conversely, a drop below the January 13 daily low of $4,569 would expose $4,550, followed by the $4,500 figure.

(Click on image to enlarge)

Gold Daily Chart

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