Gold jumps over 2% after US inflation data fuels Fed rate cut expectations
Gold surged by more than 2% on February 13, 2026, after US inflation data came in below expectations, reigniting hopes for a Federal Reserve interest rate cut later this year.
Gold prices rose more than 2% on February 13, 2026, following the release of US inflation data that came in lower than expected. The softer-than-anticipated figures renewed market expectations that the Federal Reserve might cut interest rates later this year, providing a boost to gold despite earlier concerns over strong employment data.
Spot gold surged 2.25% to $5,030.45 per ounce at 4:01pm New York time (04:01am in Thailand). Earlier in the week, gold had dropped around 3%, touching a near one-week low before bouncing back. US Gold Futures for April delivery increased 2% to $5,050.80 per ounce.
Tai Wong, an independent metals trader, commented: "Gold, especially silver, received a rebound boost after January’s CPI inflation data came in less aggressive, easing concerns sparked by the strong jobs report on Wednesday."
Spot silver also rose 2.29% to $76.88 per ounce, recovering from an 11% drop the previous day.
US inflation and expectations for Fed rate cuts
The US Labour Department reported that the Consumer Price Index (CPI) for January rose by 0.2%, below the expected 0.3% increase, following a 0.3% rise in December. This lower-than-expected inflation data has led market participants to anticipate that the Federal Reserve could reduce interest rates by around 0.63% this year, with the first rate cut potentially coming in July, according to LSEG data.
Gold, which does not pay interest, tends to benefit in low-interest-rate environments, making it an attractive asset when the cost of borrowing remains low.
On the employment front, the US saw an increase of 130,000 jobs in January, surpassing analysts’ expectations of 70,000 new positions, which further raised questions about the Fed’s monetary policy direction.
Gold demand from China remained strong ahead of the Lunar New Year, while in India, the market saw discounts being offered by sellers, indicating a shift in buying dynamics.
ANZ analysts raised their average gold price forecast for Q2 2026 to $5,800 per ounce from $5,400, citing gold as a strong risk-hedging asset. However, they also noted that industrial buyers may start to reduce purchases if they are unwilling to accept higher prices.
Platinum and palladium both saw increases, with platinum rising 3% to $2,059.90 per ounce and palladium surging 4.66% to $1,692.12 per ounce. However, both metals were expected to close the week with negative returns.
As the markets await further inflation and employment data, investors are keeping a close eye on the potential for further price movements, with expectations for gold to remain a key asset in the coming months.
