Gold prices edged lower on Tuesday, easing from the previous session’s strong advance as investors stayed on the sidelines ahead of a busy run of U.S. economic releases later in the week.
Other precious metals also traded weaker. Silver and platinum slipped despite some overnight support from a softer dollar, which later stabilized during Asian trading.
At 08:15 ET (13:15 GMT), spot gold was down 0.3% at $5,042.29 an ounce, while April gold futures fell 0.3% to $5,064.31 per ounce. Spot silver dropped 0.8% to $81.575 per ounce, and spot platinum declined 1.1% to $2,094.35 per ounce.
Volatility persists as traders hesitate to buy the dip
Precious metals have seen sharp price swings over the past week, with profit-taking and crowded positioning driving prices down from record highs. Heightened uncertainty over U.S. monetary policy — particularly ahead of a potential change in leadership at the Federal Reserve — has further fueled market volatility.
Safe-haven demand has also been uneven amid conflicting signals from U.S.-Iran relations. While officials cited progress in nuclear talks over the weekend, Washington nevertheless issued a warning on Monday urging U.S.-flagged vessels transiting the Strait of Hormuz to exercise caution.
Although gold and other metals have clawed back some recent losses, prices remain well below late-January peaks, as investors appear reluctant to chase the rebound.
“Dip-buying has been selective rather than aggressive, indicating participants are still sensitive to macro signals,” OCBC analysts said in a note.
They added that while de-dollarization trends have supported gold over the past year, near-term direction will still hinge largely on developments in the U.S. labor market and their implications for monetary policy.
Analysts at Heraeus said gold and silver have shifted away from their traditional role as safe havens and are now trading in a high-volatility environment.
“The seeds of the price decline were sown in the preceding rally that for a supposedly low-volatility safe-haven asset was exceptional,” Heraeus said. “The price of gold has gone up 5x in 10 years but the dollar index is at the same level that it was in 2015. With such a sharp price drop there was likely an element of leveraged positions being unwound, with stop losses being hit and rising margin requirements. Exchanges are still raising margin requirements for futures’ positions.”
U.S. data calendar takes center stage
Investors are now turning their attention to a packed U.S. economic calendar that could provide clearer signals on growth and interest rate prospects.
December retail sales data are being watched closely for insight into consumer spending trends amid signs of cooling in the labor market. January nonfarm payrolls figures are due Wednesday, followed by the consumer price index on Friday. Both reports are expected to influence Federal Reserve policy expectations, given the central bank’s focus on inflation and employment.
Markets are also assessing the outlook for monetary policy under Kevin Warsh, President Donald Trump’s nominee to replace Jerome Powell as Federal Reserve chair when his term ends in May.
Seen as less dovish, Warsh’s nomination previously triggered steep sell-offs across precious metals markets — losses that have yet to be fully reversed. Gold fell from near-record highs around $5,600 per ounce, while silver retreated from levels above $120 per ounce.
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