Gold prices extended losses on Friday during Asian hours, as investors took profits after U.S. President Donald Trump said he would unveil his choice for the next Chair of the Federal Reserve later in the day. The prospect of reduced uncertainty around U.S. monetary leadership weighed on safe-haven demand following a powerful rally earlier in the month.
Spot gold dropped 3.6% to $5,180.26 an ounce, while April gold futures slid 2.8% to $5,199.24 per ounce by 01:28 ET (06:28 GMT). Even after the pullback, bullion remained on track for a standout January, having notched multiple record highs over recent weeks.
Other precious metals also moved sharply lower after a volatile week. Spot silver fell 5.5% to $109.2920 an ounce after retreating from Thursday’s record peak, while platinum declined 6.5% to $2,474.98 an ounce. The sell-off followed a surge on Thursday that pushed gold close to $5,600 an ounce, driven by heightened safe-haven buying amid reports of potential further U.S. military action against Iran. Market volatility was briefly exacerbated by a technical issue at the London Metal Exchange.
Trump set to name Fed Chair; Warsh leads speculation
Trump told reporters on Thursday evening that he plans to announce his nominee for Federal Reserve Chair on Friday morning. Several media outlets have reported that former Fed governor Kevin Warsh is the leading candidate, an interpretation reinforced by Trump’s remarks. “A lot of people think that this is somebody that could have been there a few years ago,” Trump said.
Warsh, who narrowly missed out on the top Fed role in 2017, has generally supported Trump’s calls for more aggressive interest rate cuts. His potential appointment comes at a time when markets are increasingly alert to questions around the Federal Reserve’s independence, given Trump’s repeated public pressure on the central bank to ease policy more forcefully.
The Fed held interest rates steady at its meeting earlier this week, and Jerome Powell cautioned during the post-meeting press conference that his successor should steer clear of electoral politics. Trump’s announcement is expected to remove a key source of market uncertainty, which could further dampen near-term demand for gold as a safe haven.
Nevertheless, expectations that a new Fed leadership team could pursue deeper rate cuts may still support gold prices over the longer term. The relatively smaller drop in gold futures compared with spot prices suggested that investors are already factoring in this possibility.
Gold still up around 20% in January as silver outperforms
Despite Friday’s sharp decline, spot gold was still up roughly 20% for January, while other precious metals were also on track for strong monthly gains. The rally has been fuelled by a broad shift into safe-haven assets amid elevated global geopolitical tensions.
A weaker U.S. dollar—driven by concerns over fiscal sustainability and uncertainty surrounding future interest rate policy—has also underpinned metals markets. Silver has been the standout performer, set to post gains of more than 50% this month, while platinum has risen about 20% and palladium nearly 18%.
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