Emre Yumlu 
Precious metals retreated modestly after the release of stronger-than-expected U.S. employment figures, which reinforced the dollar and tempered expectations for near-term interest rate cuts. Market participants are now shifting their attention to upcoming inflation data, due Friday, for further guidance on the Federal Reserve’s policy trajectory. The robust labor market report signaled resilience in the U.S. economy, prompting a reassessment of monetary easing expectations and triggering a mild correction in gold and silver prices.
Gold Extends Losses as Dollar Strengthens
Spot gold declined 0.3% on Thursday to $5,063.11 per ounce, giving back part of the more than 1% gain recorded in the previous session. U.S. gold futures for April delivery followed a similar pattern, slipping 0.3% to $5,083.90 per ounce.
The move coincided with a rise in the U.S. dollar index. A stronger dollar typically weighs on commodities priced in dollars, as it makes them more expensive for holders of other currencies, thereby limiting demand.
Labor Market Details and Revisions
January employment growth in the United States exceeded expectations, while the unemployment rate eased to 4.3%. However, downward revisions to prior data revealed that total job creation for 2025 amounted to 181,000 positions, significantly below the previously estimated 584,000. This suggests that, despite the headline strength, underlying labor market momentum may be softer than initially perceived.
The data has slightly reduced the likelihood of an imminent rate cut by the Federal Reserve. Market consensus points to no policy change through May, with a potential rate reduction beginning in June.
Fiscal Outlook and Policy Uncertainty
Adding to the macroeconomic backdrop, the Congressional Budget Office projects the U.S. budget deficit to reach $1.853 trillion in fiscal year 2026. In a low-growth environment, widening fiscal imbalances may complicate the broader economic outlook.
Investors are also monitoring potential leadership changes at the Fed, with some assessments suggesting that a new chair could pursue a more accommodative monetary stance.
Silver and Other Precious Metals
Silver mirrored gold’s decline. Spot silver traded around $83.29, posting a daily loss of 1.07% after a nearly 4% surge in the previous session. The pullback underscores ongoing volatility across the precious metals complex.
Platinum fell 0.8% to $2,113.79, while palladium edged up 0.9% to $1,715.30. Markets now await weekly jobless claims and the forthcoming inflation report, both of which are expected to play a decisive role in shaping expectations for the Fed’s next policy steps.
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