Gold falls below record highs but holds above $5,000

Gold prices fell on Tuesday but remained above $5,000 an ounce, as investors remained cautious ahead of key U.S. jobs and inflation data later this week that will determine the Federal Reserve’s interest rate path.

Spot gold fell 0.7 percent to $5,029.49 an ounce by 03:32 GMT. The metal had risen 2 percent on Monday as the dollar fell to its lowest level in more than a week. It had hit a record high of $5,594.82 an ounce on January 29.

US gold futures for April delivery fell 0.5 percent to $5,052 an ounce.

The spot price of silver fell 2.1 percent to $81.64 an ounce, after rising nearly 7 percent in the previous session. It had reached an all-time high of $121.64 on January 29.

Ilya Spivak, head of global macroeconomics at Tatsui Life, said: “The cold war and economic competition between the United States and China is unlikely to end for years to come… So we are in a situation where gold has a general upward bias, and the question now is to what extent the Federal Reserve’s short-term monetary policy expectations will affect it.”

The dollar suffered sharp losses on Tuesday, while the yen held onto its gains following Prime Minister Sanae Takaichi’s landslide election victory.

Spivak added that gold is moving around the $5,000 level between upper and lower price ranges, while silver is showing greater volatility in speculative trading.

White House economic adviser Kevin Hassett said on Monday that U.S. job gains may be lower in the coming months due to slowing labor force growth and rising productivity, reinforcing the debate within the Federal Reserve about the path of interest rates.

Investors anticipate at least two interest rate cuts of 25 basis points each in 2026, with the first cut expected in June. The precious metal, which does not offer a yield, tends to perform well in low interest rate environments.

Data expected this week includes December’s monthly retail sales, January’s consumer price index, and January’s non-farm payrolls report.

The spot price of platinum fell 2.1 percent to $2,084.09 an ounce, while palladium lost 1.7 percent to $1,710.75.

 Asharq -Al Awsat