Gold prices fell as much as 8% on Friday, briefly falling below the $5,000 per ounce level, as the dollar strengthened following President Donald Trump’s announcement of his selection as Federal Reserve Chairman, even as bullion prices recorded their biggest monthly rise since 1982.
Spot gold fell 5.8% to $5,081.52 an ounce as of 9:37 a.m. ET (14:37 GMT), after retreating to an intraday low of $4,957.53 a day earlier. U.S. gold futures for February fell 4.1% to $5,079.60.
The decline, which analysts described as profit-taking, also put pressure on other precious metals.
Suki Cooper, global head of commodity research at Standard Chartered Bank, said the trigger for the decline could be a combination of factors ranging from the Fed chair’s announcement to broader macro flows.
Whether you look at the dollar or real yield expectations, a combination of these factors is helping to induce profit-taking, she added.
In May, President Trump nominated former Fed Governor Kevin Warsh to replace Jerome Powell as Fed chair, placing the frequent critic of the central bank in a key leadership role.
Gold hit an all-time high of $5,594.82 on Thursday, continuing to rise more than 17% this month, marking its sixth straight month of gains.
The U.S. dollar index rose 0.4%, rebounding from a four-year low earlier this week, making dollar-priced gold more expensive for overseas buyers.
Meanwhile, Joe Cavatoni, senior market strategist for the Americas and head of US public policy at the World Gold Council, said: “In an environment shaped by policy uncertainty, rising debt burdens and geopolitical risks, gold is increasingly seen as a strategic portfolio allocation rather than a short-term trade.”
Gold premiums in India hit a 10-year high on investment demand, while jewelery and investment returns rose in China.
Among other precious metals, spot silver fell 13.9% to $99.94 per ounce after falling to $95.79 per ounce. The metal hit a record high of $121.64 on Thursday and is up 40% this month, marking its best monthly performance.
Spot platinum fell 12.1% to $2,310.11 an ounce, and palladium fell 8.3% to $1,839.01.
(Reporting by Anmol Chobey and Anushree Mukherjee in Bengaluru; Editing by Shailesh Kuber)
