Gold Falls Below $5,000 as Silver Slides Amid U.S. Rate Uncertainty
Gold prices dropped below key psychological levels in Asian trading on Monday, while silver recorded sharper losses as investors continued to assess the outlook for U.S. interest rates. Mixed U.S. inflation data has kept precious metals markets volatile, adding to uncertainty over future Federal Reserve policy moves.
Metal prices have experienced significant swings over the past two weeks and remain well below their late-January highs.
Spot gold declined 1.2% to $4,982.10 per ounce, while April gold futures slipped 0.9% to $5,001.76 per ounce. Spot silver posted the steepest losses among major precious metals, tumbling nearly 3% to $75.4505 per ounce. Platinum also weakened, falling 1% to $2,047.25 per ounce.
Trading activity was subdued due to holiday closures in China, South Korea and the United States, resulting in thinner liquidity and amplified price moves.
Dollar Stability and Mixed CPI Weigh on Precious Metals
The U.S. dollar held steady in Asian trade as investors digested January’s consumer price index (CPI) report released on Friday. The data showed a slight slowdown in headline inflation, while core CPI met market expectations.
Although gold and silver benefited last week from dollar weakness and dip-buying, the broader trend remains uncertain. Rising geopolitical tensions between the United States and Iran also supported safe-haven demand, offering temporary relief to precious metals.
However, both metals continue to trade significantly below their late-January peaks. Persistent volatility reflects growing uncertainty over the Federal Reserve’s long-term interest rate strategy.
Gold’s earlier decline was partly triggered by U.S. President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair, replacing Jerome Powell when his term ends in May. Warsh is widely viewed as less dovish, raising concerns that monetary policy may not ease substantially in the coming years.
Analysts at ANZ noted that investor attention is increasingly shifting toward the potential inflationary impact of tariffs, which has not yet fully appeared in economic data. They added that ongoing doubts about future Fed policy credibility could strengthen demand for real assets such as gold over the longer term.
Fed Minutes and PCE Inflation Data in Focus
This week, markets are closely watching upcoming U.S. economic data for further direction. Minutes from the Federal Reserve’s January policy meeting are scheduled for release on Wednesday and are expected to provide additional clarity on the central bank’s rate outlook.
Investors will also monitor the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge. The upcoming reading is likely to influence expectations for future interest rate adjustments.
Additional U.S. data releases, including trade figures and industrial production, are also on the radar and may contribute to further volatility in precious metals markets.
As uncertainty around interest rates and inflation persists, gold and silver prices remain sensitive to both macroeconomic signals and geopolitical developments.
