Gold prices fell sharply on Friday, sliding as much as 8% and briefly dropping below the $5,000 per ounce level, after the U.S. dollar strengthened following an announcement by Donald Trump on his choice for the next Federal Reserve chair. Despite the steep pullback, bullion remained on track for its strongest monthly gain since 1982.
Spot gold was down 5.8% at $5,081.52 per ounce by 09:37 a.m. ET (14:37 GMT), after touching an intraday low of $4,957.53 earlier in the session. U.S. gold futures for February delivery declined 4.1% to $5,079.60.
Analysts largely described the move as profit-taking after gold’s recent record-breaking rally. The sell-off also spilled over into other precious metals.
According to Suki Cooper, global head of commodities research at Standard Chartered Bank, the decline likely reflects a mix of factors, including the Federal Reserve leadership announcement and broader macroeconomic flows. She noted that shifts in the dollar and expectations around real yields combined to trigger the wave of profit-taking.
Trump announced that former Federal Reserve Governor Kevin Warsh will succeed Jerome Powell as chair of the Federal Reserve in May, placing a long-time critic of the central bank into one of the most influential monetary policy roles.
Gold had surged to a record high of $5,594.82 on Thursday and is still set to post a gain of more than 17% for the month, marking its sixth consecutive monthly advance.
The U.S. dollar index rose 0.4%, rebounding from a four-year low earlier in the week. A firmer dollar typically weighs on gold by making the metal more expensive for non-U.S. buyers.
Despite the short-term correction, longer-term sentiment toward gold remains constructive. Joe Cavatoni, senior market strategist for the Americas and head of public policy in the U.S. at the World Gold Council, said gold is increasingly viewed as a strategic portfolio asset amid policy uncertainty, rising debt levels, and heightened geopolitical risks, rather than just a short-term trade.
Physical demand trends also remained supportive. Gold premiums in India climbed to decade highs on strong investment demand, while China recorded increased buying from both jewellery consumers and investors.
Other precious metals posted even steeper losses. Spot silver fell 13.9% to $99.94 per ounce, after hitting a session low of $95.79. Although silver reached a record $121.64 on Thursday, it is still up roughly 40% for the month, on pace for its strongest monthly performance on record.
Platinum declined 12.1% to $2,310.11 per ounce, while palladium slid 8.3% to $1,839.01, rounding out a volatile session across the precious metals complex.
