Gold Prices Plunge to $5,183 per Ounce Amid Market Volatility

Gold prices dropped sharply on Friday, falling more than 4% amid rumors that the next Federal Reserve chair could adopt a more hawkish stance, though the metal remains on track for its strongest monthly gain since 1980.

Spot gold declined 3.9% to $5,183.21 per ounce as of 03:23 GMT, after earlier dropping as much as 5%, following Thursday’s record high of $5,594.82. Despite Friday’s fall, gold has risen more than 20% in January, marking its sixth consecutive monthly gain and the largest monthly advance since January 1980. February US gold futures fell 2.7% to $5,176.40 per ounce.

KCM Chief Trade Analyst Tim Waterer noted that the decline was driven by expectations of a potentially less dovish Fed chair, a rebound in the dollar, and overbought conditions in gold markets. President Donald Trump announced that he would reveal his pick to replace Fed Chair Jerome Powell on Friday, fueling speculation over future US monetary policy.

The US dollar rebounded from multi-year lows, partly reflecting the Fed’s recent decision to leave interest rates unchanged, though it remains set for a second consecutive weekly decline. A stronger dollar tends to weigh on gold as it becomes more expensive for foreign buyers. Markets continue to anticipate two rate cuts in 2026.

Meanwhile, gold exports from Switzerland to the UK, home to the largest over-the-counter trading hub, rose to their highest levels since August 2019. In Hong Kong, the Hang Seng Gold ETF surged over 9% during its trading debut.

Other precious metals also saw volatility: spot silver dropped 5.7% to $109.55 per ounce after a record high of $121.64 on Thursday, platinum fell 5.3% to $2,489.31 after a Monday all-time high of $2,918.80, while palladium rose 5.8% to $1,890.25.