Gold prices fell sharply on Friday amid market speculation that the next Federal Reserve chair could adopt a more aggressive stance on interest rates. Despite the drop, the precious metal remains on course for its strongest monthly gain since January 1980, fueled by persistent demand for safe-haven assets.
Spot gold declined 3.9% to $5,183.21 per ounce during Asian trading, after earlier falling as much as 5%. This followed a record high of $5,594.82 reached on Thursday. For the month, gold has still rallied more than 20%, marking a sixth consecutive monthly advance.
The sell-off followed comments from U.S. President Donald Trump, who said he would announce his pick to succeed Fed Chair Jerome Powell on Friday. Rumors that former Fed governor Kevin Warsh—viewed as more hawkish—could be selected pressured gold prices during Asian trading hours.
“A potentially less dovish Fed chair, a rebound in the dollar, and overbought conditions have all contributed to gold’s pullback,” said Tim Waterer, chief trade analyst at KCM.
A stronger U.S. dollar, which rebounded from multi-year lows after the Fed held rates steady this week, also made dollar-priced gold more expensive for international buyers.
Despite Friday’s retreat, bullish momentum for gold remains evident. Switzerland’s gold exports to the UK—home to a major over-the-counter trading hub—reached their highest level since August 2019. Additionally, a new gold-backed ETF in Hong Kong surged more than 9% in its debut session.
In other precious metals, silver fell 5.7% to $109.55 an ounce but is still up 56% for the month, on track for its strongest monthly performance on record.
Markets continue to expect two interest rate cuts in 2026, keeping longer-term expectations for monetary policy supportive of non-yielding assets like gold.
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