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What is the story about?
What happened: Gold tumbled more than 4% on Thursday as investors locked in gains after prices scaled a fresh record high. Spot gold fell 4.6% to $5,149.99 an ounce by late morning in New York, after touching an intraday peak of $5,594.82. US futures for February delivery slipped 2.8% to $5,156.20.
David Meger, director of metals trading at High Ridge Futures, attributed the sharp correction to profit-taking following an extended rally. “We are seeing a dramatic sell-off after precious metals made new recent all-time highs,” news agency Reuters quoted him as saying.
The context: Despite the sharp pullback, bullion remains up roughly 19% this month and 3.6% this week, positioning January as its strongest month since the 1980s. Traders described the move as a dramatic sell-off following stretched positioning after a relentless rally.
The bigger picture: Demand for safe-haven assets has broadened beyond traditional buyers. Brian Lan, managing director at GoldSilver Central, said precious metals remain in focus as investors chase elevated returns in uncertain times.
Crypto issuer Tether said it plans to allocate 10–15% of its portfolio to physical gold, while holdings of the SPDR Gold Trust are near a four-year high. Geopolitical tensions, including renewed friction between Washington and Tehran along with uncertainty around US monetary policy, have kept bullion in focus.
US President Donald Trump on Wednesday urged Iran to re-engage in negotiations over a nuclear deal, prompting threats of retaliation from Tehran against the US, Israel and their allies.
On the monetary policy front, the US Federal Reserve left interest rates unchanged on Wednesday. Markets are now awaiting the White House’s nomination to succeed Federal Reserve Chair Jerome Powell, whose term ends in May. Investors broadly expect the central bank to begin cutting rates in June — a move that could further underpin non-yielding assets such as gold.
US markets react: The gold sell-off unfolded alongside heightened volatility across risk assets. Equities also came under pressure, with the Nasdaq Composite dropping more than 2% amid a sharp decline in Microsoft shares. The technology major’s quarterly earnings unsettled investors due to higher-than-expected capital expenditure and a slowdown in cloud revenue growth.
Silver fell 6.6% to $108.84 an ounce after earlier touching $121.64, though it remains up more than 50% this year. Platinum and palladium also retreated after recent record highs. Platinum eased 1.7% to $2,650.15 an ounce, having touched a record $2,918.80 earlier this week, while palladium declined 6.7% to $1,935.
Analysts cautioned that smaller precious metals markets are more vulnerable to speculative flows, amplifying price swings that may be detached from underlying physical demand fundamentals.
David Meger, director of metals trading at High Ridge Futures, attributed the sharp correction to profit-taking following an extended rally. “We are seeing a dramatic sell-off after precious metals made new recent all-time highs,” news agency Reuters quoted him as saying.
The context: Despite the sharp pullback, bullion remains up roughly 19% this month and 3.6% this week, positioning January as its strongest month since the 1980s. Traders described the move as a dramatic sell-off following stretched positioning after a relentless rally.
The bigger picture: Demand for safe-haven assets has broadened beyond traditional buyers. Brian Lan, managing director at GoldSilver Central, said precious metals remain in focus as investors chase elevated returns in uncertain times.
Crypto issuer Tether said it plans to allocate 10–15% of its portfolio to physical gold, while holdings of the SPDR Gold Trust are near a four-year high. Geopolitical tensions, including renewed friction between Washington and Tehran along with uncertainty around US monetary policy, have kept bullion in focus.
US President Donald Trump on Wednesday urged Iran to re-engage in negotiations over a nuclear deal, prompting threats of retaliation from Tehran against the US, Israel and their allies.
On the monetary policy front, the US Federal Reserve left interest rates unchanged on Wednesday. Markets are now awaiting the White House’s nomination to succeed Federal Reserve Chair Jerome Powell, whose term ends in May. Investors broadly expect the central bank to begin cutting rates in June — a move that could further underpin non-yielding assets such as gold.
US markets react: The gold sell-off unfolded alongside heightened volatility across risk assets. Equities also came under pressure, with the Nasdaq Composite dropping more than 2% amid a sharp decline in Microsoft shares. The technology major’s quarterly earnings unsettled investors due to higher-than-expected capital expenditure and a slowdown in cloud revenue growth.
Silver fell 6.6% to $108.84 an ounce after earlier touching $121.64, though it remains up more than 50% this year. Platinum and palladium also retreated after recent record highs. Platinum eased 1.7% to $2,650.15 an ounce, having touched a record $2,918.80 earlier this week, while palladium declined 6.7% to $1,935.
Analysts cautioned that smaller precious metals markets are more vulnerable to speculative flows, amplifying price swings that may be detached from underlying physical demand fundamentals.
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