The latest on gold prices....

The sharp volatility seen in global markets in recent sessions has been a defining factor in the actions of gold investors. After the sudden sell-off wave seen in the previous session, gold prices have partially recovered their losses, while investors have attempted to turn the pullbacks into opportunities ahead of critical US inflation data.

Starting Friday with momentum, spot gold recorded a rise of up to 1.4% during the session. Previously, it had witnessed its sharpest daily decline in a week with a 3.2% loss in value. It is noted that concerns on Wall Street regarding the potential impact of artificial intelligence on corporate profits and the broad-based sell-off across asset classes were influential in this sharp decline.

Liu Shiyao, an analyst at Zijin Tianfeng Futures, states that investors holding different assets in their portfolios have been forced to sell commodities to meet margin calls. He emphasizes that in such situations, selling in one market creates pressure on other instruments as well.

While similar activity was observed in silver, this precious metal experienced a loss of nearly 11% in Thursday's trading. Experts point out that profit-taking may also have been effective in the recent sell-off in gold. In this volatile environment, losses have been partially recovered following the historic sell-off recently seen in precious metals. Despite all the volatility, gold is expected to finish the week on a relatively flat note.

Investors' attention has now turned to inflation data that could provide clues regarding the policy to be followed by the US Federal Reserve (Fed). Strong employment figures released for January indicated that the Fed does not have to be in a hurry regarding interest rate cuts within the year. As is known, a possible drop in interest rates can positively affect non-interest-bearing precious metals.

Renowned hedge fund manager David Einhorn said in a statement to CNBC on Wednesday that he believes the Fed will cut interest rates "much more" than the markets expect. He also pointed out that Kevin Warsh, whom Donald Trump nominated for the Fed Chairmanship, could act to provide lower borrowing costs.

Gold, which broke a historic record by rising to 5,595 dollars per ounce on January 29, had risen with intense speculative buying. However, after this rally, there was some capital outflow from the markets with a rapid decline of up to 13% in the following two sessions.

Major banks agree that gold will maintain its upside potential for the rest of the year. In particular, geopolitical risks, question marks over the Fed's independence, and the tendency to flee from classic investment vehicles continue to be important factors in supporting precious metals. While BNP Paribas has set its year-end target at 6,000 dollars per ounce, Deutsche Bank and Goldman Sachs also offer positive forecasts.

As the week draws to a close, spot gold rose 1.1% to 4,977.44 dollars per ounce in the morning hours according to Singapore time; silver rose 1.9% and traded at 76.70 dollars. Platinum prices recorded a 1.4% increase, while palladium rose 2.2%. The Bloomberg Dollar Spot Index, which tracks the US dollar, rose 0.1%.

News Source: 12punto