In the vibrant and dynamic trading hall of the New York Mercantile Exchange, the atmosphere was charged with anticipation as traders focused intently on the fast-moving electronic displayOn this particular trading day, gold futures prices witnessed a notable decline, dropping below the important psychological threshold of 2880 dollars per ounce during the closing hours, closing at 2880.1 dollars per ounceThis represented a decrease of 0.45% compared to the previous trading daySilver futures fared even worse, finishing at 32.665 dollars per ounce, reflecting a more substantial drop of 0.94%.

The fluctuations in the market emerged from a complex web of intertwining factorsOn the same day, the U.SBureau of Labor Statistics released data indicating that the number of first-time jobless claims for the week ending February 1 had climbed to 219,000, an increase of 7,000 from the revised figure of 212,000 from the week before, and surpassing the market expectation of 214,000. This marked the end of a declining trend over three consecutive weeks

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Although still situated within historically low ranges, the slight uptick in claims was sufficient to elicit concerns within the markets regarding the economic outlookAt a hedge fund office in Chicago, macro strategist James Smith analyzed the data, observing, "The rise in initial jobless claims could signal a cooling of the labor market, which would impact the pace of interest rate cuts by the Federal Reserve."

Adding to the sell-off in precious metals was a strengthening dollar index, which became a principal force suppressing the prices of gold and silverNew U.STreasury Secretary Scott Behnke reiterated in an interview with CNBC that "a strong dollar aligns with the national interests of the United States." This assertion led the dollar index to climb during the New York trading session, reaching 108.25, a peak not seen in nearly two weeksThe negative correlation between the dollar and gold became particularly stark at this moment, demonstrating that for every 1% rise in the dollar, gold priced in euros could increase by approximately 15 dollars, yet it diminishes the allure of gold for Dollar-holding investorsIn a precious metals trading firm in London, trader Tom Brown adjusted his positions, stating, "We established short positions around 2890 dollars, and the strength of the dollar gives us confidence in our bearish outlook for gold."

Technical factors contributed to the intensified selling pressure on the markets, particularly evident through overbought signalsThe globally renowned SPDR Gold Trust, the largest gold exchange-traded fund (ETF), saw its holdings decrease by 4.5 tons on Thursday, marking the most significant single-day reduction in nearly a month

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Technical analysts noted that the Relative Strength Index (RSI) had breached the overbought territory at 72 on Wednesday, but corrected down to 68 by ThursdaySuch technical pullback signals triggered automatic liquidation orders from algorithmic trading systems, where high-frequency traders executed tens of thousands of trades in fractions of a second, further amplifying price volatility.

Anticipated shifts in U.S. monetary policy emerged as core variables affecting market dynamicsCME Group's FedWatch tool indicated that the probability of a 25 basis point rate cut by March 2025 had decreased to 62%, down from the previous week's 70%. This change in expectations directly influenced the interest rate futures market, prompting the two-year U.STreasury yield to rise to 4.25% on Thursday, setting a record high since November 2024. Traders began recalibrating interest rate swap positions, anticipating a tightening of cumulative expected rate cuts for the entire year from 100 basis points to a refined 75 basis points.

For average investors, the current market landscape is fraught with challengesThe fusion of high volatility, policy uncertainties, and geopolitical risks necessitates a more cautious approachMorgan Stanley's latest report recommended increasing the proportion of gold holdings from 5% to 7%, emphasizing a strategy of "long-term holding with short-term hedges." Conversely, BlackRock introduced an innovative gold ETF that combines gold with inflation-linked bonds, providing investors a dual layer of protection against both price fluctuations and inflationary pressures.

The volatility within the precious metals market reflects profound structural contradictions inherent in the global economy

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