The precious metals market remains calm. Currently, gold hovers around $4465 per ounce, ending the week with a 3.4% gain, but the upward momentum has clearly slowed down. The reason is simple— the dollar is acting up. The Bloomberg U.S. Dollar Spot Index has surged 0.5% since the beginning of the year. The stronger the dollar, the more expensive gold priced in other currencies becomes, naturally cooling buyers' enthusiasm.

Last Thursday's initial unemployment claims data came in slightly better than expected, further dampening gold's performance. But the real test has yet to come. The US economic data due to be released on Friday will not only influence short-term gold price fluctuations but also potentially set the tone for this year's interest rate policy. Market participants are now weighing between these two forces— whether the dollar's strength will intensify or whether economic data will give the Federal Reserve more reasons to cut rates.