Gold prices fell more than 7% 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 still on course for its biggest monthly gain since 1999 after hitting multiple record highs.
Other precious metals also fell sharply due to profit-taking.
Spot gold fell 7.5% to $4,992.05 an ounce by 0947 GMT. US gold futures for February delivery fell 6.4% to $4,985.
Gold hit a record high of $5,594.82 on Thursday and is still up more than 15% this month, heading for its sixth straight month of gains and its biggest gain since 1999.
“We believe there are still some factors supporting gold, but sentiment is healthy after the strong rally in recent weeks,” said UBS analyst Giovanni Staunovo, adding that the possible nomination of a new Fed chair was putting immediate pressure on prices. US President Donald Trump said on Thursday that he would announce the selection for the next Federal Reserve chairman on Friday, with former Fed director Kevin 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 rose on Friday, reversing some of this week’s decline to a four-year low. The strength of the U.S. currency makes 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 14.1% to $99.77 an ounce after hitting a record high of $121.64 on Thursday. The metal has soared 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 15.7% to $2,216.55 an ounce after hitting a record high of $2,918.80 on Monday. Meanwhile, palladium fell 13.4% to $1,737.50. (Reporting by Pablo Sinha in Bengaluru; Additional reporting by Swati Verma; Editing by David Goodman)
