Gold prices fell more than 8% on Friday, falling below the $5,000 milestone as the dollar strengthened with the impending appointment of a new Federal Reserve chairman, but the safe-haven gold is on course for its biggest monthly gain since 1982 after hitting multiple record highs.
Other precious metals also fell sharply due to profit-taking.
Spot gold fell as low as $4,957.54 early in the session, but was down 5% to $5,124.37 an ounce by 11:32 a.m. Japan time. US gold futures for February delivery fell 3.9% to $5,118.40.
Gold hit a record high of $5,594.82 on Thursday and is still up more than 18% this month, heading for its sixth consecutive month of gains.
“Kevin Warsh, who is seen as more hawkish than the other candidates, is expected to be appointed as Fed chair, which appears to be putting downward pressure on precious metals prices,” said Hamad Hussein of Capital Economics.
US President Donald Trump is expected to announce his choice to be the next Fed chairman on Friday, with former Fed director George Warsh seen as the frontrunner. Mr. Warsh has pushed to shrink the Fed’s balance sheet, in contrast to Mr. Trump’s tendency toward accommodative monetary policy.
The U.S. dollar strengthened on Friday, reversing some of this week’s decline to a four-year low, making dollar-priced gold more expensive for overseas buyers.
India’s spot gold premium has risen to its highest level in more than a decade on strong investment demand ahead of tariff hikes. Premiums in China soared as investment and jewelery demand recovered.
“While gold prices are much lower than they are now, we expect them to recover and average $5,375 in 2026, reaching a peak of $6,400 in the fourth quarter,” said independent analyst Ross Norman.
Among other precious metals, spot silver fell 11.7% to $102.57 an ounce after falling to $95.79. The metal hit a record high of $121.64 on Thursday and is up 42% this month, marking its best monthly performance.
“While a significant portion of silver’s upward movement is based on sound fundamentals, there is clearly a speculative excess within the market that I think is being blown out,” Norman added.
Spot platinum fell 10.9% to $2,343.40 an ounce after hitting a record high of $2,918.80 on Monday. Meanwhile, palladium fell 8.4% to $1,838.14.
(Reporting by Pablo Sinha in Bengaluru; Additional reporting by Swati Verma; Editing by David Goodman)
