On Thursday, a surprising dip in “terror data” led to a depreciation of the US dollar index, which hovered around the 109 mark, ultimately closing down by 0.15% at 108.94. This decline was accompanied by a continuation of the downward trend in US Treasury yields; the benchmark 10-year Treasury yield settled at 4.617%, while the more sensitive 2-year yield ended at 4.234%. In the equities market, the three major indices in the US faced a collective downturn, with the Dow Jones falling by 0.16%, the S&P 500 decreasing by 0.21%, and the Nasdaq experiencing a sharper decline of 0.89%.

The weakness of US economic data further catalyzed a surge in gold pricesAccording to the report from the US Department of Labor, initial jobless claims rose to 217,000 for the week ending January 11, surpassing the market expectation of 210,000. This uptick suggests a softening labor market that may impact consumer confidence and spendingAdditionally, although December retail sales posted a month-on-month increase of 0.4%, it was slightly below market predictionsHowever, the increase for November was revised up to 0.8%. The release of this data has led to a more dovish outlook regarding the Federal Reserve's future monetary policy.

The decline in Treasury yields also played a significant role in pushing gold prices higherWith the weak economic data, the market's expectations for a Federal Reserve rate cut have begun to growFederal Reserve Board Governor Christopher Waller indicated that if the economic data continues to weaken, there could still be room for three to four rate cuts this yearSuch anticipations led to a pullback in the 10-year Treasury yield, dropping it to a more than week-long low, thereby reducing the opportunity cost of holding gold, further enhancing its appeal among investors.

Geopolitical factors have also influenced the gold market to some extent

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US Secretary of State Antony Blinken conveyed that despite some unresolved issues, a ceasefire agreement is still set to take effect on the 19thThis news slightly alleviated concerns over geopolitical risks in the market, although investors must remain vigilant for any potential developments that may arise in the future.

From a macroeconomic perspective, significant worries about the US economic growth outlook persistWhile there are some positive indicators, such as the Philadelphia Fed Manufacturing Index soaring to 44.3 in January—far exceeding expectations—these isolated highlights do little to overshadow the broader economic concernsThe US is grappling with a slowdown in the growth of real disposable income, a decline in private fixed investment, a widening trade deficit, and underutilization in manufacturing capacityConsequently, the sustainability of overall economic growth remains widely questionedAnalysts suggest that should key economic data, such as retail sales and employment figures, continue to disappoint in the coming months, the market may reassess its expectations for the Fed's monetary policy and heighten the anticipation for further rate cuts, thereby reducing the opportunity cost of holding gold.

In summary, the current fundamentals are decidedly bullish for goldInvestors today will continue to observe the lower support area of the ascending trendline over the past four hours, and after a potential stabilization from any corrections, they may find further opportunities to invest in gold.

Geopolitical dynamics also play a pivotal role in the oil marketRecently, developments in the Middle East, particularly a de-escalation of tensions, have shown a direct influence on crude oil pricesMaritime safety officials pointed out that the establishment of a series of ceasefire agreements will likely help ease tensions in the region and reduce threats to global oil transportation.

The performance of the US economic data significantly impacts demand expectations for crude oil

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