FX.co ★ Gold Extends Losses

Gold continues to decline, slipping below $4,820 per ounce on Thursday as a reaction to indications of waning US economic growth and labor market struggles, which prompted a widespread reduction in risk rather than a shift to safe-haven assets. In January, US companies reported 108,400 job cuts—the highest for January since 2009—while initial jobless claims rose to 231,000, exceeding expectations. Additionally, ADP data revealed that private payroll growth was significantly below forecasts. These weaker labor indicators have strengthened the anticipation of Federal Reserve rate cuts later this year, with markets eyeing a potential initial cut in June and a possible follow-up in September. Nevertheless, the immediate response in the markets has led to a deleveraging trend in crowded trades, leading to sharp sell-offs in equities, cryptocurrencies, and silver, which in turn has put pressure on gold prices due to liquidation flows following last week’s substantial rally. Meanwhile, the European Central Bank and the Bank of England opted to keep rates unchanged, with the Bank of England taking a notably dovish stance.