Strong Dollar Limits Gold's Stability Despite Safe-Haven Demand

Credit: Reuters 

On Friday, gold prices remained stable, with Chinese markets closed for the Lunar New Year holiday and a stronger U.S. dollar offsetting safe-haven demand driven by tensions in the Middle East. Spot gold held steady at $2,032.70 per ounce, while U.S. gold futures were unchanged at $2,048.40 per ounce. The dollar index and 10-year Treasury yield were both poised for weekly gains.

The closure of China's Shanghai Futures Exchange for the Lunar New Year holidays influenced the market. Middle East tensions, Chinese New Year demand, and concerns about U.S. regional banks provided support for gold, according to Hugo Pascal, a precious metals trader at InProved.

Attention will turn to the upcoming U.S. consumer price index report as Federal Reserve officials indicated a reluctance to cut interest rates until they were more confident about inflation reaching the 2% target.