Gold fell more than 4% on Friday on rumors that the Federal Reserve could get a more hawkish chair, but was still on track for its biggest monthly gain since 1980 as investors flocked to safe havens amid lingering geopolitical and economic tensions.
Spot gold fell 3% to $5,232.57 an ounce at 0520 GMT, after earlier falling more than 5%. It hit an all-time high of $5,594.82 on Thursday.
Prices are up more than 20% so far in January, heading for the sixth straight month of gains and the biggest monthly gain since 1980.
U.S. gold futures for February delivery fell 1.8% on Friday to $5,225.0 an ounce.
“Thus, a potentially less dovish Fed chair selection, a rebound in the dollar and a decline in gold from an overbought situation contributed to the decline in precious metals prices,” said KCM Chief Trade Analyst Tim Waterer.
US President Donald Trump said on Thursday that he would announce his choice to replace Federal Reserve Chairman Jerome Powell on Friday, fueling speculation that that candidate would be former Fed Director Kevin Warsh.
“Rumors of Kevin Warsh replacing Jerome Powell as Fed chairman are weighing on gold in Asian trade,” said Matt Simpson, senior analyst at StoneX.
The dollar has rebounded from multi-year lows, helped by the Federal Reserve’s decision to keep interest rates on hold on Wednesday, but has suffered a second straight week of declines.
A strong dollar makes dollar-priced gold more expensive for overseas buyers. The market still expects two rate cuts in 2026.
Gold exports from Switzerland to Britain, home to the world’s largest over-the-counter gold trading hub, surged to the highest level since August 2019, customs data showed on Thursday.
The Hang Seng Gold ETF soared more than 9% in its trading debut in Hong Kong last session.
Spot silver fell 3.6% to $111.99 an ounce after hitting a record high of $121.64 on Thursday. The metal has soared 56% so far this month and is on track for its best monthly performance ever.
Spot platinum fell 3.7% to $2,531.84 an ounce after hitting an all-time high of $2,918.80 on Monday, while palladium fell 4% to $1,925.50.
(Reporting by Ishaan Arora in Bengaluru; Editing by Subransh Sahu and Rashmi Aich)
