Gold Slips as U.S. Jobs Data Strengthens Dollar

Key Moments

Gold Edges Lower but Selling Pressure Stays Limited

Gold (XAU/USD) trades near the bottom of its intraday range ahead of the European session on Thursday. The move follows stronger U.S. labor data. However, selling pressure remains modest. Importantly, the metal still holds above $5,050, close to last session’s two-week low.

Traders reduced expectations for near-term Fed rate cuts after the Nonfarm Payrolls report. As a result, gold lost some ground. Even so, broader macro conditions remain supportive. Therefore, sellers have not gained full control.

Strong Jobs Data Shifts Fed Expectations

Wednesday’s Nonfarm Payrolls report showed solid labor market growth. The U.S. economy added 130K jobs in January. That figure beat expectations of 70K and followed a revised 48K increase in December. Consequently, investors scaled back bets on aggressive Fed easing.

Other data also pointed to strength. The Unemployment Rate fell to 4.3% from 4.4%. In addition, Average Hourly Earnings rose 3.7% year-over-year, above the 3.6% forecast. Because of this, markets now see a 95% chance that the Fed will hold rates steady in March. That figure stood near 80% just one day earlier.

Fed Officials Signal Caution on Rate Cuts

Federal Reserve officials have also urged caution. For example, Cleveland Fed President Beth Hammack said the labor market is moving toward balance. She stressed the need to bring inflation back to the 2% target. Moreover, she noted that policy sits near neutral and supports keeping rates steady.

Similarly, Kansas City Fed President Jeffrey Schmid warned against cutting rates too quickly. He argued that further easing could allow inflation to stay high for longer. As a result, markets have pushed back expectations for near-term cuts. This shift has influenced both gold and the U.S. Dollar.

Dollar Rebounds but Upside Remains Capped

The U.S. Dollar has rebounded from a two-week low after the jobs report. However, the recovery lacks strong momentum. Investors still expect two 25-basis-point cuts later this year, with the first likely in July. Therefore, the Dollar’s upside may remain limited.

In addition, concerns about the Fed’s independence may restrain further Dollar gains. Taken together, these factors help cushion gold on the downside.

Inflation and Jobless Claims in Focus

Markets now turn to U.S. inflation data due Friday. That report could offer clearer signals about the Fed’s next move. As a result, it may drive both the Dollar and gold.

Before that, traders will watch Weekly Initial Jobless Claims on Thursday. Until fresh data arrives, Fed expectations and Dollar moves will likely guide short-term price action.

Technical Outlook: Support Holds Firm

On the 4-hour chart, signals appear mixed. The MACD histogram stands at 0.17 and moves closer to the zero line. This suggests fading upside momentum. Meanwhile, the RSI reads 55.65, which reflects a neutral tone with a slight bullish bias.

The 200-period SMA continues to trend higher. Importantly, XAU/USD trades above this level. The average sits at $4,757.23 and acts as dynamic support.

From a Fibonacci view, gold trades between key levels. The 50% retracement stands at $5,004.47 and offers support. Meanwhile, the 61.8% level at $5,144.94 acts as resistance. A break above $5,144.94 could strengthen the recovery. Otherwise, gold may continue to consolidate above the rising 200-period SMA.

(The technical analysis of this story was written with the help of an AI tool.)

Federal Reserve: Role and Policy Tools

The Federal Reserve sets U.S. monetary policy. It operates under a dual mandate: stable prices and maximum employment. To achieve this, the Fed mainly adjusts interest rates.

When inflation rises above 2%, the Fed raises rates. Higher rates increase borrowing costs and often support the U.S. Dollar. Conversely, when inflation falls or unemployment rises, the Fed may cut rates. Lower rates typically weigh on the Dollar.

Gold holds a constructive tone near $5,060 in early Asian trading, grinding higher even after upbeat US labor data. Markets now shift focus to Friday’s US CPI report, a key catalyst for rate expectations. Safe-haven flows continue to underpin the metal as US–Iran tensions simmer,… pic.twitter.com/VeSCOWN7W3

— Gillian (@CFA_Gillian) February 12, 2026

FOMC Structure and Meetings

The Federal Open Market Committee meets eight times per year. It reviews economic data and sets policy. The committee includes twelve members. These consist of seven Governors, the New York Fed president, and four rotating regional presidents.

Quantitative Easing and the Dollar

During severe downturns, the Fed may use Quantitative Easing. Under QE, it buys large amounts of bonds to boost liquidity. This policy supports credit flow in weak markets.

As the money supply expands, the Dollar often weakens. The Fed used QE during the 2008 financial crisis.

Quantitative Tightening Explained

Quantitative Tightening is the opposite of QE. Under QT, the Fed allows bonds to mature without reinvesting proceeds. As a result, liquidity declines.

This process typically supports the U.S. Dollar because it tightens financial conditions.