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Date: 11th February 2026.
Gold Breaks from Its Traditional Dollar Correlation?
The announcement of Kevin Warsh as the Federal Reserve Chairman nominee and heavy profit-taking have driven Gold down by 21%. Though the asset has recently regained 58% of its lost value. Gold’s outlook will now heavily depend on today’s employment data and Friday’s inflation rate.
The price movement of Gold has been somewhat static, forming range-bound conditions but with a slight bullish bias. However, when also analysing the price of the US Dollar, the correlation does not follow its traditional path. The USD has come under immense pressure over the past week, but Gold’s upward trend has been less volatile.
However, traders should note that correlations have weakened temporarily in the past but later showed a delayed response.
However, analysts expect inflation to decline to 2.5%, an 8-month low and fairly close to the Fed’s target. As a result, the Federal Reserve may consider a small adjustment within March, which is not currently priced into the market.
Yesterday, Stephen Miran, a member of the US Federal Reserve Board, said that the Republican administration’s trade policy has had only a limited impact on the US economy. He explained that most of the costs from higher tariffs and taxes have been absorbed by foreign companies. He also added that the effect on US household spending has been small.
Analysts see his comments as a sign that inflation pressures are gradually easing. This could give the Federal Reserve room to adjust monetary policy if needed, while still maintaining financial stability.
Meanwhile, White House Economic Adviser Kevin Hassett said that job growth may slow in the coming months. He pointed to slower growth in the labour force, higher productivity, and fewer migrant workers entering the country as factors that could reduce overall employment growth.
The US Dollar is the worst-performing currency of the day and of the past week.
Data released the day before showed a sharp slowdown in retail sales, falling from 3.3% to 2.4% year-over-year and from 0.6% to 0.0% month-over-month, while investors had expected 0.4% growth. Excluding vehicle sales, the figure also dropped to 0.0% MoM, confirming that November's increase was only a short-term holiday boost.
At the same time, consumers are raising concerns about rising prices and acting more cautiously amid a tense labor market. Still, the broader environment remains moderately supportive of industrial production, investment, and business spending, helping sustain the overall economic recovery after recent short-term shocks.
The main driver would be today's NFP Employment Change and Friday's Consumer Price Index (inflation data). Traders speculating upward price movement would ideally be hoping for the unemployment rate to rise by 0.1% and for inflation to fall to 2.4%, not 2.5%.
National Economic Council Director Kevin Hassett tells the market to expect weaker employment data and “not to panic.”
As a result, investors are increasing gold holdings, and central banks are boosting physical gold purchases. According to the World Gold Council, gold demand hit a record 863 tons last year and remains strong. China's central bank is also increasing gold reserves as it seeks to reduce reliance on the US Dollar.
HFM - XAUUSD 10-Minute Chart
Over the past 24 hours, gold has formed a range-bound price pattern and is showing slightly more bullish than bearish momentum. The price continues to remain above the Moving Averages and the Volume-Weighted Average Price. The MACD and other Oscillators also remain on the positive side despite the lack of bullish price movement.
Today, the price is trading upwards with higher highs and lows on smaller timeframes. However, if the price falls below $5,038.85, the short-term bullish signals will fade.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyze the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Michalis Efthymiou
HFMarkets
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Gold Breaks from Its Traditional Dollar Correlation?
The announcement of Kevin Warsh as the Federal Reserve Chairman nominee and heavy profit-taking have driven Gold down by 21%. Though the asset has recently regained 58% of its lost value. Gold’s outlook will now heavily depend on today’s employment data and Friday’s inflation rate.
The price movement of Gold has been somewhat static, forming range-bound conditions but with a slight bullish bias. However, when also analysing the price of the US Dollar, the correlation does not follow its traditional path. The USD has come under immense pressure over the past week, but Gold’s upward trend has been less volatile.
However, traders should note that correlations have weakened temporarily in the past but later showed a delayed response.
The US Dollar Index
The US Dollar Index is trading lower on Wednesday and has also fallen in value over the previous three trading days. The currency has been performing relatively well towards the end of January and the first week of February. This is due to investors expecting a hawkish Federal Reserve and no imminent rate cut.However, analysts expect inflation to decline to 2.5%, an 8-month low and fairly close to the Fed’s target. As a result, the Federal Reserve may consider a small adjustment within March, which is not currently priced into the market.
Yesterday, Stephen Miran, a member of the US Federal Reserve Board, said that the Republican administration’s trade policy has had only a limited impact on the US economy. He explained that most of the costs from higher tariffs and taxes have been absorbed by foreign companies. He also added that the effect on US household spending has been small.
Analysts see his comments as a sign that inflation pressures are gradually easing. This could give the Federal Reserve room to adjust monetary policy if needed, while still maintaining financial stability.
Meanwhile, White House Economic Adviser Kevin Hassett said that job growth may slow in the coming months. He pointed to slower growth in the labour force, higher productivity, and fewer migrant workers entering the country as factors that could reduce overall employment growth.
The US Dollar is the worst-performing currency of the day and of the past week.
XAUUSD - Economic Data and Dollar Weakness Supports Gold
The weakening US Dollar is one of the main factors that could push gold prices higher. However, even though Gold prices remain somewhat stable and elevated, the price is not forming a bullish trend. Traditionally, due to the correlation between the USD and Gold, Gold would normally be at least 9%; however, the increase is barely maintaining a rise of 5%.Data released the day before showed a sharp slowdown in retail sales, falling from 3.3% to 2.4% year-over-year and from 0.6% to 0.0% month-over-month, while investors had expected 0.4% growth. Excluding vehicle sales, the figure also dropped to 0.0% MoM, confirming that November's increase was only a short-term holiday boost.
At the same time, consumers are raising concerns about rising prices and acting more cautiously amid a tense labor market. Still, the broader environment remains moderately supportive of industrial production, investment, and business spending, helping sustain the overall economic recovery after recent short-term shocks.
The main driver would be today's NFP Employment Change and Friday's Consumer Price Index (inflation data). Traders speculating upward price movement would ideally be hoping for the unemployment rate to rise by 0.1% and for inflation to fall to 2.4%, not 2.5%.
National Economic Council Director Kevin Hassett tells the market to expect weaker employment data and “not to panic.”
Geopolitical Tensions To Return?
Gold is also supported by ongoing geopolitical tensions, particularly in the Middle East, where talks between Iran, Israel, and the United States have failed. The US continues to demand a full dismantling of Iran's nuclear and missile programs while keeping sanctions in place.As a result, investors are increasing gold holdings, and central banks are boosting physical gold purchases. According to the World Gold Council, gold demand hit a record 863 tons last year and remains strong. China's central bank is also increasing gold reserves as it seeks to reduce reliance on the US Dollar.
XAUUSD - Technical Analysis
HFM - XAUUSD 10-Minute Chart
Over the past 24 hours, gold has formed a range-bound price pattern and is showing slightly more bullish than bearish momentum. The price continues to remain above the Moving Averages and the Volume-Weighted Average Price. The MACD and other Oscillators also remain on the positive side despite the lack of bullish price movement.
Today, the price is trading upwards with higher highs and lows on smaller timeframes. However, if the price falls below $5,038.85, the short-term bullish signals will fade.
Key Takeaways:
- Gold rebounded after a sharp drop, recovering 58% of its 21% decline, but lost momentum in the past 24-hours.
- The US Dollar is weakening, but Gold's rise has been relatively modest despite the typical inverse correlation.
- Upcoming economic data is key, with today's NFP and Friday's inflation report likely to determine gold's next major move.
- Geopolitical tensions and central bank demand support gold, with record global purchases and continued buying from China.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyze the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Michalis Efthymiou
HFMarkets
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
