Key Moments
- Spot gold dropped more than 4% on Friday but remained on course for its biggest monthly gain since 1980.
- Rumors that a more hawkish candidate could replace Jerome Powell as Fed chair pressured gold and boosted the dollar.
- Silver, platinum, and palladium also declined after recently touching record or all-time highs.
Safe-Haven Rally Pauses After Fed Chair Speculation
Gold prices retreated sharply on Friday, falling more than 4% amid market chatter that the next Federal Reserve chair could adopt a more hawkish stance. The pullback came even as the metal remained set for its strongest monthly performance since 1980, supported by ongoing geopolitical and economic concerns that have driven sustained demand for safe-haven assets.
Spot gold was down 3% at $5,232.57 per ounce as of 0520 GMT, after briefly plunging more than 5% earlier in the session. The move followed a fresh record high of $5,594.82 reached on Thursday.
Despite the intraday slide, prices have advanced more than 20% so far in January, positioning the metal for a sixth consecutive monthly gain and its largest monthly rise since 1980.
Futures and Dollar Move on Fed Uncertainty
U.S. gold futures for February delivery declined 1.8% to $5,225.0 per ounce on Friday.
“So, a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal,” KCM Chief Trade Analyst Tim Waterer said.
Uncertainty around Federal Reserve leadership intensified after U.S. President Donald Trump said on Thursday that he intends to announce his choice to replace Fed Chair Jerome Powell on Friday. Market speculation has increased that former Fed Governor Kevin Warsh may be selected.
“Rumours that Kevin Warsh will replace Jerome Powell as Fed Chair have weighed on gold during Asian trade,” said Matt Simpson, a senior analyst at StoneX.
Dollar Recovery and Interest Rate Expectations
The U.S. dollar recovered from multi-year lows, helped partly by the Fed’s decision on Wednesday to keep interest rates unchanged. Even with the rebound, the currency was still set for a second consecutive weekly decline.
A firmer dollar typically makes dollar-denominated gold more expensive for buyers using other currencies. Market pricing continued to reflect expectations for two interest rate cuts in 2026. [USD/][FEDWATCH]
Flows, ETFs, and Physical Market Indicators
In the physical market, Swiss customs data released on Thursday showed that gold exports from Switzerland to the UK – home to the world’s largest over-the-counter gold trading hub – climbed to their highest level since August 2019.
Interest in gold-related investment products also remained strong. The Hang Seng Gold ETF surged more than 9% on its trading debut in Hong Kong in the previous session.
Broad-Based Pullback Across Precious Metals
Other precious metals also came under pressure after recent powerful rallies and record levels.
| Metal | Latest Price | Move on Day | Recent Peak | Month-to-Date Performance |
|---|---|---|---|---|
| Spot gold | $5,232.57/oz | -3% | $5,594.82 (record high, Thursday) | +more than 20% |
| U.S. gold futures (Feb) | $5,225.0/oz | -1.8% | Not stated | Not stated |
| Spot silver | $111.99/oz | -3.6% | $121.64 (record high, Thursday) | +56% so far this month |
| Spot platinum | $2,531.84/oz | -3.7% | $2,918.80 (all-time high, Monday) | Not stated |
| Palladium | $1,925.50/oz | -4% | Not stated | Not stated |
Spot silver fell 3.6% to $111.99 per ounce after touching a record high of $121.64 on Thursday. The metal has surged 56% so far this month, putting it on pace for its strongest monthly performance on record.
Spot platinum declined 3.7% to $2,531.84 per ounce, pulling back after reaching an all-time high of $2,918.80 on Monday. Palladium fell 4% to $1,925.50.
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