Gold rallies as weak US data boosts Fed rate cut expectations

Gold prices surged following disappointing US economic data that reinforced expectations for Federal Reserve rate cuts in 2025. The weaker-than-expected US employment and manufacturing indicators have pressured the US Dollar Index lower, providing support for the precious metal. Market participants are now pricing in a higher probability of Fed easing, with gold benefiting from the declining real yield environment. The inverse correlation between gold and the dollar remains strong, with XAUUSD finding immediate support at previous resistance levels. EUR/USD and USD/JPY movements reflect the broader dollar weakness, with the euro gaining ground while the yen strengthens on safe-haven flows. Technical indicators suggest gold could extend gains toward $2,050 if the dollar weakness persists, while support sits at $1,980. The upcoming US jobless claims data will be crucial in confirming this dovish Fed narrative.