Gold prices rose Friday, bouncing after losses in the previous session, with focus turning to rising tensions in the Middle East and upcoming U.S. inflation data for more cues. 

At 04:25 ET (09:25 GMT), Spot gold rose 1.1% to $4,977.33 an ounce and gold futures for April rose 1% to $4,996.35/oz.

Spot prices tumbled over 3% in the prior session. 

Spot silver rose 4% to $78.703/oz, after wiping out some 10% in the prior session, while spot platinum rose 0.6% to $2,034.65/oz, climbing back above $2,000/oz after logging deep losses in the prior session. 

Safe haven demand helps bullion

Bullion has benefited from some safe haven demand on Friday after a host of reports said Washington planned to deploy a second aircraft carrier -- the USS Gerald R. Ford -- in the Middle East, as nuclear talks with Iran faltered. 

Uncertainty over future U.S. interest rate cuts was a major weight on metal prices, especially after payrolls data showed some signs of resilience in the labor market in January. The dollar came off its weekly lows following Wednesday’s nonfarm payrolls print. 

US CPI data awaited for more cues

The focus is now squarely on U.S. consumer price index inflation data for January, due later on Friday, for more cues on the world’s largest economy.

Labor market strength and inflation are the Federal Reserve’s two biggest considerations for interest rates. 

Markets broadly expect headline and core CPI to have cooled in January. But the January print has consistently surprised to the upside for the past four years, leaving markets on edge over a hawkish reading.

"An unexpected rise in inflation could reduce the Fed’s desire to cut interest rates further, making gold less attractive for investors," ANZ analysts wrote in a note. 

Relatively high interest rates diminish the appeal of non-yielding assets such as gold, while any strength in the dollar also stands to pressure the yellow metal. 

Gold, precious metals set for muted week 

Thursday’s losses saw gold and other precious metals largely reverse a recent rebound, with the yellow metal now trading up marginally for the week. 

Precious metals have struggled for direction since a flash crash in late-January, with uncertainty over U.S. interest rates being a key point of pressure.

Gold’s slump from recent records was initially triggered by U.S. President Donald Trump nominating Kevin Warsh as the next Chairman of the Federal Reserve, with Warsh being viewed as a less dovish pick.

Stronger-than-expected nonfarm payrolls data for January added to concerns over fewer interest rate cuts, while wild price swings in precious metals also dampened their safe haven appeal.

Futures linked to Canada’s main stock exchange edged up on Thursday, as investors assessed a string of corporate earnings and awaited more cues on the U.S. economy later in the week.

By 07:43 ET (12:43 GMT), the S&P/TSX 60 index standard futures contract had risen by 3 points, or 0.2%.

The S&P/TSX composite index inched down marginally to 33,254.19 on Wednesday, retreating from an intra-day record high notched earlier in the session. An all-time closing peak was previously logged on Tuesday.

A slump in shares of Shopify, which projected underwhelming free cash flow margins, weighed on the wider technology sector in Canada during the session. Real estate and financial stocks also declined.

But the commodities-heavy index was bolstered by gains in materials and energy stocks, reflecting higher oil and precious metals prices.

U.S. futures tick higher

Meanwhile, U.S. stock futures rose. At 07:55 ET, Dow Jones Futures traded 128 points, or 0.3%, higher, S&P 500 Futures gained 21 points, or 0.3%, and Nasdaq 100 Futures added 73 points, or 0.3%.

The main averages on Wall Street edged lower on Wednesday, ending a three-day winning streak, following a blockbuster jobs report which well outpaced economists’ expectations but pushed back traders’ expected timeline for the next Federal Reserve interest rate cut.

At the close of trading, the blue-chip Dow Jones Industrial Average fell 0.1%, but remained above the key 50,000 level it breached earlier this week. The benchmark S&P 500 slipped marginally lower, while the tech-heavy Nasdaq Composite slid by 0.2%.

Strong jobs report reduces Fed easing bets

Data on Wednesday showed that U.S. nonfarm payrolls increased by 130,000 last month, well above economists’ expectations, while the unemployment rate ticked down to 4.3%.

The stronger labor data reinforced the view that the U.S. economy remains resilient but also reduced the odds that the Fed will cut interest rates soon, pushing traders to scale back bets on imminent policy easing.

The report also included notable revisions to past data that highlighted underlying weakness in the labor market over the past year.

"The U.S. added more jobs than expected in January, but sizeable downward revisions reveal that – outside of leisure & hospitality, private healthcare, and government – the economy has actually been consistently losing jobs," ING analysts said in a note.

"This suggests the risks remain tilted toward the Fed cutting rates more than the two reductions currently in our forecast," they added.

There are more jobs numbers to digest later Thursday, in the form of the weekly initial jobless claims. ahead of Friday’s consumer price index (CPI) report, as traders seek further clues about the inflation trend and the timing of future rate moves.

Earnings season marches on

The fourth-quarter 2025 earnings season is now clearly past the midpoint, and the news has been generally positive: companies are delivering, revisions are moving higher, and earnings growth remains in double digits.

Arista Networks and semiconductor player Applied Materials are due to headline results after the close.

Networking equipment maker Cisco Systems unveiled quarterly gross margin that was short of analysts’ estimates late Wednesday, sending its shares sharply lower in premarket trading.

A rush of spending on the data centers needed to underpin AI models has depleted much of the global supply of memory chips, driving up the prices of these processors. This has, in turn, hit Cisco, whose routers and switches are often powered by memory chips.

McDonald’s topped Wall Street estimates for fourth-quarter global comparable sales and profit, as meal deals and strong marketing promotions pulled in budget-strapped U.S. diners and demand held firm in Australia and Britain.

Gold edges lower

Gold and silver prices were lower, as the stronger-than-expected U.S. payrolls data hit wagers for an impending Fed rate cut, although losses were limited by lingering haven demand.

Markets are now pricing in a 92.5% chance the Fed will leave rates unchanged in March, and a 79.1% probability of a similar outcome in April, CME FedWatch showed.

The jobs report also spurred an overnight bounce in the dollar, which weighed on metal markets.

Still, precious metal prices retained a bulk of their advances made this week, with tensions between Iran and the U.S. helping keep safe-haven demand in play.

Crude reverses earlier gains

Oil prices dropped below the flatline, reversing earlier gains, after a report from the International Energy Agency forecast that world oil demand is seen rising at a slower pace than initially anticipated in 2026

The outlook for annual oil demand growth was revised moderately lower to 850,000 bpd, with the IEA pointing to the impact of higher crude prices and broader economic uncertainties. China, the world’s largest oil importer, is anticipated to remain the largest contributor to this increase, albeit well below its average growth over the past decade, IEA said.

Crude rose earlier on Thursday, as relations between Washington and Tehran remained tense, raising concerns of supply disruptions from this key crude-producing region.

Brent futures were last down 0.3% to $69.17 a barrel, and U.S. West Texas Intermediate crude futures fell 0.2% to $64.51 a barrel.

The benchmarks rose around 1% on Wednesday, as traders were seen pricing in a greater risk premium following reports that suggested Washington was considering sending a second aircraft carrier to the region. While Iran and the U.S. had touted some progress in talks held over the weekend, there still appeared to be no conclusive deal on Tehran’s nuclear activities, leaving markets on edge.

Futures linked to the major U.S. stock indices point up ahead of a much-anticipated U.S. employment report, which could influence the outlook for Federal Reserve interest rate policy later this year. Ford books a multi-million-dollar charge due to a delay in U.S. tariff relief, but a better-than-expected forecast supports the carmaker’s shares in extended hours trading. An activist investor reportedly pushes Warner Bros. Discovery to walk away from Netflix’s offer, in the latest twist in a long-running takeover saga.

1. Futures rise

U.S. stock futures inched higher on Wednesday, as investors awaited a fresh monthly jobs report and assessed a raft of corporate earnings.

By 02:33 ET (07:33 GMT), the Dow futures contract had risen by 91 points, or 0.2%, S&P 500 futures had climbed by 12 points, or 0.2%, and Nasdaq 100 futures had ticked up by 48 points, or 0.2%.

While the blue-chip Dow Jones Industrial Average notched a fresh record close on Tuesday, the benchmark S&P 500 and tech-heavy Nasdaq Composite both slid, weighed down in part by more worries around the implications of new artificial intelligence tools.

Financial services stocks were hit by an AI-based tax planning product from wealth management startup Altruis. Charles Schwab slipped by more than 7%, while peer Raymond James fell to its worst one-day drop since the height of the COVID-19 pandemic in 2020.

This downturn echoed a similarly AI-fueled slump in insurance brokers and software companies in recent sessions, underlining fears that the nascent technology could have deep and widespread disruptions on a variety of industries — although some analysts have described such jitters as overblown.

Meanwhile, stalling retail sales factored into investor sentiment, leading some observers to suggest that the economy could be on a path to slower growth in 2026. Wagers that the Federal Reserve will take a more dovish stance later this year increased, with CME FedWatch showing an uptick in the probability of an April interest rate reduction.

2. Jobs data ahead

With this data hanging in the backdrop, Wednesday’s main event will likely come from the economic calendar, where a delayed reading of U.S. employment growth is due to be released.

The figures are projected to show that the U.S. economy added some 66,000 roles in January, up from 50,000 in December.

At its latest monetary policy meeting last month, the Fed described the labor market as “stabilizing” after a recent bout of sluggishness. This argument, combined with signs of steady — albeit elevated — inflation, persuaded the Fed to keep interest rates unchanged at a range of 3.5% to 3.75%.

But White House economic adviser Kevin Hassett warned earlier this week that AI advances could dent U.S. job gains in the coming months, even as productivity is boosted.

The outlook for the current year subsequently remains somewhat murky, given the uncertainty around the trajectory of jobs and prices — the Fed’s two main policy pillars. The upcoming jobs report, along with a fresh consumer price index on Friday, could help bring more clarity around the evolution of rates in 2026.

"Today’s jobs report is a pivotal event for the [foreign exchange] market. A materially weak print would likely pave the way for markets to price in a cut in April," analysts at ING said in a note.

3. Ford books charge from "unexpected" tariff relief delay

Shares of Ford Motor inched up in extended hours trading after the U.S. carmaker outlined profit and cash flow guidance that was better than analysts’ expectations.

The group predicted that annual operating income would stand at roughly $9 billion, compared to Wall Street estimates of about $8.85 billion. Expected free cash flow of $5.5 billion also raced above projections.

However, Ford posted a fourth-quarter operating loss of $11.1 billion — its largest ever. The company booked a charge of $900 million linked to a delay in the effective date of a Trump administration tariff-relief program.

CFO Sherry House told investors that Ford was notified about the "unexpected" change “very late” in 2025.

Earnings season is set to continue later today with Cisco Systems, McDonald’s, and T-Mobile US among the headliners.

4. Activist investor urges Warner Bros. to walk away from Netflix offer - WSJ

Elsewhere, investors were keeping tabs on a flurry of reported developments in the drama around the battle for Hollywood stalwart Warner Bros. Discovery.

The Wall Street Journal reported that activist investor Ancora Holdings has built up about a $200 million stake in Warner and is gearing up to urge the business to reject Netflix’s massive offer for both its movie and television unit and HBO Max streaming service.

Citing people familiar with the matter, the WSJ said Ancora could unveil the position as soon as Wednesday, and argue that Warner has yet to adequately engage with Paramount Skydance’s rival bid, which would see the David Ellison-run company buy all of Warner, rather than specific parts.

The report came as Paramount sweetened its proposal by offering Warner shareholders extra cash for every quarter that the deal fails to be finalized. Paramount said it would also pay for any fee Warner incurs for walking away from the Netflix deal.

However, Paramount did not raise its overall offer, which, including debt, stands at $108.4 billion.

5. Gold edges higher

Gold prices rose after the soft U.S. retail sales data drummed up bets that the world’s largest economy was cooling, amplifying the focus on impending payrolls data for more definitive cues.

Despite logging some gains this week, precious metal prices remained volatile after tumbling from record highs in late-January, and have since struggled to recover. Recent declines in the dollar offered limited support.

Uncertainty over geopolitical tensions in the Middle East also kept haven-linked demand for gold under pressure.

Spot gold was last up 0.4% to $5,047.08 an ounce, while gold futures had risen 0.8% to $5,071.34.oz. Spot prices remained below recent record highs.

In oil markets, Brent crude prices gained 1.2% to $69.64 a barrel and U.S. West Texas Intermediate crude increased 1.3% to $64.81 a barrel.

Futures linked to Canada’s main stock index were higher on Tuesday, as investors looked ahead to a bevy of crucial U.S. data points later this week.

By 06:20 ET (11:20 GMT), the S&P/TSX 60 index standard futures contract had risen by 2 points, or 0.1%.

The S&P/TSX composite index jumped by 1.7% to 33,023.32 on Monday, extending an advance from the preceding session.

Underpinning the increase in the commodity-heavy average was an uptick in gold prices, which helped boost the materials sector, including metal mining shares.

U.S. futures muted

U.S. stock futures hovered around the flatline, pointing to a potentially cautious open as investors digest more corporate earnings ahead of delayed U.S. jobs and inflation data.

At 06:33 ET, the Dow Jones Futures traded 27 points, or 0.1%, higher, S&P 500 Futures gained 6 points, or 0.1%, and Nasdaq 100 Futures were largely unchanged.

The main averages on Wall Street gained on Monday, extending increases notched to end the previous trading week, thanks largely to advances in tech stocks exposed to the artificial intelligence-driven boom in data centers. The blue-chip Dow Jones Industrial Average recorded a new record closing high, extending a recent run that saw the index break the 50,000 level the prior week.

Coca-Cola earnings on tap

Attention is firmly on the quarterly earnings season, with results due from the likes of Coca-Cola Co, Spotify and Hasbro Inc during the session.

The fourth-quarter 2025 US earnings season is in full swing, and while overall trends are positive, the market is becoming more discerning. It is actively rewarding companies that deliver solid results while punishing those with poor performance or weak future guidance.

In extended hours movers, ON Semiconductor (NASDAQ:ON) unveiled underwhelming fourth-quarter revenue due to an ongoing inventory glut. Many of the Arizona-based firm’s customers are continuing to work their way through stockpiles of chips built during recent supply chain constraints.

Sluggish electric car sales and increased competition from China have also threatened to cloud the forecast for Onsemi’s silicon carbide chips unit. The group’s current-quarter sales projection range was below Wall Street estimates at the midpoint.

Retail sales due ahead of payrolls, CPI

On the macroeconomic front, investors are focused on U.S. labor market and inflation data that were postponed following a recent government shutdown.

The closely watched monthly U.S. jobs report is now due on Wednesday, while the January consumer price index report has been rescheduled for release on Friday.

Both reports are expected to play a key role in shaping expectations for the Federal Reserve’s policy path, particularly around the timing and pace of any interest rate cuts later this year.

Signs of cooling inflation or a softer labor market could reinforce hopes for easier monetary policy later in 2026.

Ahead of this, retail sales for December are due later in the session, with consumer spending seen ass a crucial engine of the overall American economy, amounting to more than two-thirds of total output.

"The retail sales control group is expected to grow at a reasonably healthy 0.4% month-on-month and can maintain the view that the U.S. consumer is alive and well," said analysts at ING, in a note. "This thesis can extend throughout March once what should be a healthy set of tax rebate checks arrives towards the end of this month."

Gold slips slightly

Gold prices fell on Tuesday, retreating from strong gains in the prior session as metal markets remained on edge before a string of key U.S. economic readings due this week.

Silver and platinum prices also fell, having taken limited support from an overnight drop in the dollar, although the greenback steadied in Asian trade.

Oil steadies

Oil prices rose as relations between the U.S. and Iran remained fraught, keeping risks of supply disruptions from the Middle East elevated.

Brent futures gained 0.5% to $69.39 a barrel, and U.S. West Texas Intermediate crude futures inched up 0.3% to $64.58 a barrel.

The benchmarks rose more than 1% on Monday after the U.S. Department of Transportation’s Maritime Administration advised U.S.-flagged vessels to stay as far away from Iranian territory as possible when passing through the Strait of Hormuz and Gulf of Oman.

Much-anticipated jobs and inflation data are likely to be the marquee events of the trading week. A raft of fresh tech sector results will be in the limelight as well following recent volatility in software stocks. Japanese Prime Minister Sanae Takaichi’s big election bet appears to have been successful, while doubt surrounds U.K. Prime Minister Keir Starmer’s future in the role.

1. U.S. jobs data in focus

Highlighting this week’s economic calendar will be the release of postponed official employment figures for January.

The closely-watched jobs report, which was delayed by a short-lived three-day federal government shutdown which came to an end last Tuesday, is anticipated to show that the U.S. economy added 70,000 roles in January, down from 50,000 in the prior month. The data is due out on Wednesday.

Economists will be on the hunt for any indications that the U.S. labor picture is "stabilizing," a characterization recently used by Federal Reserve Chair Jerome Powell. The Fed slashed interest rates multiple times in 2025 in a bid to provide support to a slowing labor market weighed down by widespread, tariff-fueled economic uncertainty.

Data last week found that the amount of Americans filing for first-time unemployment benefits rose by more than expected, largely because of fierce winter storms. Job openings in December also slipped to a five-year low, although much of the decline was especially prevalent in the professional and business services sector -- a fact which some observers argued could be a sign of the pressure artificial intelligence is placing on some office workers.

2. Inflation data looms large

Figures tracking U.S. inflation, set to be published on Friday, are also set to headline the economic docket.

The Labor Department’s headline consumer price index for the twelve months to January is projected to slow to 2.5%, decelerating from 2.7% in December. Month-over-month, the number is seen equaling the December pace of 0.3%.

Along with job growth, inflation is a key a pillar of the Fed’s dual mandate, meaning that both of the numbers could factor heavily into how the U.S. central bank approaches borrowing costs in 2026.

Last month, policymakers left rates unchanged, pointing to the potentially steadying labor market as well as inflation that remains muted, albeit above the Fed’s 2% target range.

The upcoming data trove comes as markets have been volatile in recent days, fueled in part by worries around the possible impact AI may have on the software industry. Follow a steep selloff last week, stocks on Wall Street rebounded on Friday.

In a note, analysts at Capital Economics said they "suspect U.S. economic data this week might help investors’ nerves recover further[.]"

3. More tech earnings ahead

Hovering in the background will also be a deluge of corporate earnings, particularly from tech industry players.

Key updates from names like Onsemi, Datadog, Spotify, Cisco Systems, and Applied Materials are due to be released, possibly offering a fresh look into an industry which has been knocked by the emergence of powerful new AI tools.

The unveiling of a plugin from AI startup Anthropic’s workplace assistance focused on legal and administrative tasks triggered a sharp dive in software stocks last week, as investors fretted over whether the tool could dent demand for the sector’s services.

As a result, commentary from tech executives on the outlook for AI could be in focus for analysts.

"[I]nvestors had a lot to think about following the extreme volatility from the last several sessions, including the huge rebound on Friday, which raises the question of whether the swoon (especially in tech) is over?" analysts at Vital Knowledge said in a note.

"We think the recent market swings are simply the most visible manifestations of large structural changes that have been underway beneath the surface for months, specifically in tech and AI[.]"

4. Japan PM’s big win

Beyond the U.S., Asian markets advanced on Monday in the wake of a major win for Japanese Prime Minister Sanae Takaichi in a snap election over the weekend.

Takaichi had bet big on the vote, which was coming a mere 110 days after she became Japan’s first-ever female prime minister. But the gamble has appeared to pay off, with reports saying that Takaichi’s Liberal Democratic Party garnered such sweeping support that it secured a rare supermajority in the lower house of Japan’s parliament.

The result seems to clear the path for Takaichi to pursue her proposed spending bumps and tax reductions against a political backdrop that some observers have described as stable.

"Takaichi’s decision to leverage her popularity for her party turned out to be successful. The landslide victory will reinforce her responsible but expansionary fiscal spending and a more Japan-focused foreign policy. Risk-on sentiment will dominate the market for now," said Min Joo Kang, Senior Economist at ING, in a note.

5. U.K.’s Starmer under fire

From one leader fortifying power to another facing significant pressure.

Markets will be eyeing developments in the United Kingdom, where Prime Minister Keir Starmer is under fire for one of his government’s most prominent ambassador’s ties to Jeffrey Epstein.

On Sunday, Starmer’s chief of staff, Morgan McSweeney, stepped down, assuming responsibility for Starmer’s naming of Peter Mandelson as the U.K.’s ambassador to the U.S. Files released by the U.S. Justice Department showed that Mandelson had given government documents to Epstein, while Mandelson and his now husband received payments from the late American sex offender.

Should Starmer or U.K. Chancellor Rachel Reeves be replaced, "[t]he most likely longer-lasting influence is a loosening in fiscal policy that leads to higher gilt yields than otherwise and a weaker pound than otherwise," said Ruth Gregory, Deputy Chief U.K. Economist at Capital Economics, in a note.

Oil prices held steady on Friday as investors awaited news from high-stakes talks between the United States and Iran that are taking place in Oman amid fears of another supply-disrupting Middle East conflict.

Brent crude futures rose 7 cents, or 0.1%, to $67.62 a barrel by 1055 GMT, while U.S. West Texas Intermediate crude was also up 7 cents, or 0.1%, at $63.36 a barrel.

Still, Brent was set to end the week 4.3% down, as WTI was on track to end the week little changed.

"Investors are watching the U.S.-Iran talks, and their sentiment is shaped by the outcome of these talks," said Tamas Varga, an oil analyst at brokerage PVM.

The market is waiting for the outcome of these negotiations, he said.

Lack of consensus on the agenda for the meeting between Iran and the United States has kept investors anxious about geopolitical risk.

Iran wants to stick to nuclear issues, while the United States wants to discuss Iran’s ballistic missiles and support for armed groups in the region.

Any escalation of tension between the two nations could disrupt oil flows, since about a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran.

Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does fellow OPEC member Iran.

If the U.S.-Iran talks ease the prospect of conflict in the region, oil prices could decline further.

"We think that geopolitical fears will give way to weak fundamentals," Capital Economics analysts said in a note, pointing to a recovery in Kazakhstan’s oil output that will help push prices lower, towards $50 a barrel, by the end of 2026.

On a weekly basis, prices were weighed down by a broader selloff in markets and by persisting expectations of an oversupply of oil, analysts said.

Saudi Arabia cut the official selling price of its Arab Light crude to Asia for March to around a five-year low on Thursday, marking the fourth straight month of price cuts.

"The underlying fundamental backdrop is not really encouraging, it implies an oversupplied market," said PVM’s Varga.

Silver prices tumbled in Asian trade on Thursday, leading losses across precious metals as the sector faced a wave of renewed selling that largely wiped out a short-lived rebound this week. 

Spot silver slumped as much as 16.7% to $73.5565 an ounce, coming back in sight of lows hit during last week’s rout. Silver futures for March delivery tumbled more than 10% to $73.383/oz. 

Losses in the silver metal came abruptly during the Asian session, and were accompanied by a small uptick in the dollar. 

"Even as prices of precious metals are now less elevated following the correction, sensitivity to the USD, yield repricing, and uncertainty around Fed policy under new leadership remains high. While positioning has likely reset to some extent, confidence may not have fully restored, pointing to a potential period of choppier, two-way trading," Christopher Wong, FX strategist at OCBC said in a mailed comment. 

Still, Wong viewed the recent precious metals pullback more "as a normalisation phase rather than a trend reversal," adding that the fundamentals behind the metal rally-- central bank demand for gold and industrial demand for silver-- still remained intact. 

"While higher beta and sentiment-driven flows can amplify short-term volatility, medium-term fundamentals remain supported by demand from solar PV, grid modernisation and electrification themes, which should help cushion downside once positioning and sentiment stabilise," Wong said. 

Strength in the dollar had been a major weight on precious metals over the past week, as the greenback rebounded from near four-year lows after U.S. President Donald Trump’s nominee for the next Federal Reserve Chair, Kevin Warsh, was viewed as being less dovish than markets were hoping.

This notion continued to chip away at metal prices in recent sessions. 

Traders also remained largely biased towards the dollar ahead of key central bank meetings in Europe on Thursday, and U.S. nonfarm payrolls data due next week. The payrolls data-- initially scheduled for Friday, was delayed to February 11 due to a partial government shutdown earlier in the week. 

The U.S. dollar’s recent recovery will be short-lived, holding steady before resuming a broader decline later in the year, a Reuters survey of currency strategists showed, as markets cling to interest rate cut expectations amid concerns about the Federal Reserve’s independence. 

The dollar has fallen nearly 11% since U.S. President Donald Trump took office a little over a year ago, with his repeated calls for much lower interest rates and his recent expression of indifference to a weaker dollar accelerating a recent decline.

After Trump nominated former Fed governor Kevin Warsh as Fed chair on Friday, the dollar clawed back some losses as many interpreted the choice as likely to yield fewer rate cuts this year than other candidates for the job.

The euro is forecast to hold broadly steady at its current $1.18 level at end-February and $1.185 in three months, though there was little change among FX strategists in a Reuters poll taken between January 30 and February 4 on expectations of a weaker greenback over the medium-term.

DOLLAR LIKELY TO BE ’CHOPPY’ FOR MOST OF YEAR

The six-month and one-year median euro forecasts of $1.20 and $1.21 respectively were the joint-highest levels in Reuters polls since September 2021, last matched in October 2025.

"For most of the year, including the next few weeks, the dollar is likely to be choppy," said Jane Foley, head of FX research at Rabobank. "We still don’t think the market has fully put to bed concerns about Fed independence and credibility."

Asked how the net-short dollar trade would evolve by end-February, all but two of 50 respondents said positioning would remain net-short, a view they have maintained since at least April last year.

Even with inflation running above 2% for nearly five years, the longest stretch since the early 1990s, interest rate futures traders are still pricing in two rate reductions this year.

DESIRE FOR LOWER RATES

The European Central Bank, meanwhile, is expected to keep its deposit rate steady all year. 

"The administration has been very vocal about their desire for lower rates despite the fact inflation remains quite sticky and above target. Our concern is the Fed dismisses those upside inflation risks and potentially looks to cut policy even below what may be appropriate at the time," said Alex Cohen, FX strategist at Bank of America.

"We see that risk pushing real interest rates lower, making the yield curve steeper and the dollar to continue to gradually depreciate over the course of the year."

JAPANESE YEN PREDICTED TO RISE

The Japanese yen hit a near 18-month low of around 159/$ in January, but recently has come under renewed pressure following comments by Prime Minister Sanae Takaichi seeking voter support for higher spending and tax cuts, talking up the benefits of a weaker yen.

Japan holds national elections on Sunday. 

While Takaichi later walked back her comments, worries linger that these mixed signals could hurt efforts to support a frail yen.

Still, FX strategists predicted the currency will rise about 4% to 151.33/$ in six months and to 148/$ in a year.

"Markets are clearly not keen on the Prime Minister’s policies. She has mentioned in a very Trump-like fashion the benefits of a weak yen in terms of being able to export more. But markets are very dubious about her credibility in terms of fiscal policy," Rabobank’s Foley said.

Foley added that while Takaichi has offered some reassurance on the fiscal side, markets remain wary of higher spending potentially stoking inflation and prompting an already-hawkish Bank of Japan to accelerate interest-rate hikes.

"The yen should then have a counterbalance," she said.

Gold prices rose in Asian trade on Tuesday, with silver and platinum also advancing as precious metals steadied from two days of outsized losses. 

Spot gold surged nearly 4% to $4,855.93 an ounce, while gold futures for April rose 4.4% to $4,853.79/oz. 

Spot silver rallied 5.1% to $83.105/oz, while spot platinum rose 1.7% to $2,167.67/oz. 

Gold recovers after plummeting from record highs

Gold prices had slumped as low as $4,400/oz on Monday, losing nearly $1,200/oz from a record high hit last week. 

Metals were slapped with a heavy dose of profit-taking after U.S. President Donald Trump nominated former Federal Reserve governor Kevin Warsh as the next chairman of the central bank. 

While the nomination cleared out a major point of uncertainty for markets, sapping some safe haven demand, Warsh is also seen as a less dovish pick than markets were expecting. 

Still, signs of a gold recovery appeared to be in play late-Monday, with spot gold ending well above its intraday lows. 

"Further stabilisation will be determined by the mentality of the retail market. Physical demand from this sector has been strong in recent months and could provide a strong backdrop to the selling from leveraged trades in the institutional market," ANZ analysts wrote in a note, while noting that the fundamentals behind gold still remained strong.  

Benchmark copper futures on the London Metal Exchange rose 1.2% to $13,081.95 a ton, while COMEX copper futures rose 1.4% to $5.9104 a pound. 

Recent losses in copper were far less pronounced than those seen in precious metals, as the outlook for copper demand-- amid growing energy generation and data center construction-- remained upbeat. 

ANZ analysts noted that Chinese consumers had stepped in to buy copper at discounted prices last week, with the country also seen stocking up on the red metal ahead of the Lunar New Year holiday. 

China is the world’s largest importer of copper, with demand in the country expected to remain robust as Beijing doles out more stimulative policies. 

Silver prices slid on Monday, extending a decline in the wake of the metal’s worst-ever session on Friday, after commodity exchange CME Group lifted its margin requirements.

Spot silver prices were down by more than 4% at $81.09 an ounce by 05:32 ET (10:32 GMT), paring back some losses following a slide of 12% earlier on Monday.

Since rising to a record high of $121.64 per ounce last week, silver has retreated by more than 30%.

Gold has also slumped, with the yellow metal now exchanging hands well below the $5,000 per ounce level it had topped only days ago.

"While a correction was overdue after the intense rally, the scale of Friday’s decline far exceeded most expectations," analysts at ING including Ewa Manthey and Warren Patterson said in a note.

Together, the declines in silver and gold have weighed on broader risk sentiment as the new trading week began. U.S. stock futures pointed lower and Asian equities fell, while the world’s most popular cryptocurrency, Bitcoin, was under pressure.

Over the weekend, CME Group said it would increase margins on its precious metals futures starting from the close of markets on Monday. An uptick in margin requirements can force investors to factor in a higher capital outlay, potentially denting speculation.

Meanwhile, the precipitous drop in the metals has pushed leveraged investors to offload other assets to cover margin calls.

Renewed strength in the U.S. dollar has threatened to take some of the sheen off of the metals’ appeal as well. The greenback has firmed since President Donald Trump announced Kevin Warsh as his nominee to become the next Federal Reserve Chair.

Warsh -- who formerly served as a Fed governor -- has aligned with Trump’s calls for sharply lower interest rates, although he has also balked at the Fed’s asset buying operations.