On February 6, the main Shanghai gold contract opened at RMB 419.34 per gram, while the gold TD contract opened at RMB 418.50 per gram.

Today, the front-month U.S. gold contract opened at $1,878.00 per ounce, compared with yesterday’s close of $1,877.70. Spot gold opened at $1,860.74 per ounce, versus yesterday’s close of $1,865.63 per ounce.

Gold prices have peaked and begun to decline, primarily due to two bearish factors. Prior to this sharp drop, gold had risen for three consecutive months, gaining more than $300, with no significant pullbacks during that period—a dynamic that makes gold particularly vulnerable to downward pressure whenever negative catalysts emerge.

The first negative factor is that, although the Federal Reserve delivered an unexpectedly dovish rate hike last Wednesday, the Bank of England and the European Central Bank followed suit with rate increases last Thursday—also adopting a dovish stance. Despite the shared dovish tone, investors clearly voted with their feet, favoring the U.S. dollar over the euro and the pound. As a result, EUR/USD and GBP/USD plunged, while the dollar staged a sharp rebound from a nine-month low, putting downward pressure on gold prices.

The second negative factor is last Friday’s release of U.S. January nonfarm payrolls data, which came in significantly better than market expectations, thereby dampening bets on Fed rate cuts this year. Over the past three months, gold prices have surged largely on the back of the Fed’s deceleration in the pace of rate hikes; in particular, during January, investors began pricing in a second-half rate cut, further boosting gold. However, the strong nonfarm payrolls report has now undermined those expectations, delivering a direct blow to gold prices.

Friendly Reminder: International gold has stabilized above $1,800; today’s focus is on the weekly initial jobless claims. Markets are highly volatile, so investors should proceed with caution; trading strategies are for reference only.