US Dollar Strength and Weak Job Data Put Pressure on Gold
On the US front, the broad-based US dollar gained strong traction after President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair. Therefore, the nomination led many to believe that the Fed might be less likely to take a dovish approach than previously thought. Trump later said he chose Warsh because he does not plan to raise interest rates, and the Fed is still expected to lower rates.
Thereby, the markets continue to expect two more rate cuts this year, especially after weak US data showed private-sector job growth slowed sharply in January. According to ADP, only 22,000 new jobs were added, well below expectations and the previous month’s figure. At the same time, the US ISM Services PMI remained steady at 53.8 in January, signaling continued strength in the services sector and giving the dollar some support.
Looking ahead, traders are now focused on key US data due later on Thursday, including the delayed JOLTS Job Openings report and weekly jobless claims.
China’s Weak Gold Demand Weighs on Gold Prices
On the other hand, China’s gold demand fell in 2025, which put further pressure to gold prices. According to a state-backed association, gold consumption dropped 3.57% to 950.096 metric tons. At the same time, gold production using domestic raw materials rose slightly by 1.09% to 381.339 metric tons. This weaker demand from one of the world’s largest gold buyers contributed to the sharp drop in gold during trading.