Gold Prices Ease as Strong US Data Boosts Dollar

Gold prices retreated on Thursday, pressured by a stronger U.S. dollar following an unexpected drop in weekly jobless claims. An easing of geopolitical tensions surrounding Iran also reduced demand for the metal as a safe-haven asset.

Spot gold fell 0.1% to $4,614.93 per ounce as of 1:30 p.m. ET. The decline came after bullion reached a record high of $4,642.72 on Wednesday. Meanwhile, U.S. gold futures for February delivery settled 0.3% lower at $4,623.70.

Dollar Strength Creates Headwind for Gold

The primary driver for gold's dip was fresh economic data from the United States. New applications for unemployment benefits unexpectedly fell last week, a sign of labor market strength that propelled the U.S. dollar index to its highest level since December 2. A stronger dollar typically makes gold more expensive for buyers using other currencies.

"Recent data sort of keeps expectations towards Fed on hold perhaps for the first half of the year, so the dollar index is at a multi-week high and that's providing a bit of a headwind for gold at this point," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

The Federal Reserve is widely expected to keep interest rates unchanged at its upcoming meeting on January 27-28. This comes despite calls from U.S. President Donald Trump for rate cuts. On Wednesday, Trump stated he has no plans to fire Fed Chair Jerome Powell over a Justice Department investigation but noted it was "too early" to determine his final decision. Markets are still pricing in at least two 25-basis-point rate cuts later in the year.

Geopolitical Calm Dampens Safe-Haven Appeal

Adding to the pressure on gold was a reduction in geopolitical risk. President Trump signaled a wait-and-see approach toward Iran, stating he was told that killings related to protests were easing and that he saw no immediate plan for large-scale executions.

Grant noted that these easing tensions have weighed on gold prices. However, he described the metal's recent downward move as corrective, suggesting that traders may view the lower prices as a buying opportunity. Gold typically performs well during periods of economic and political uncertainty, especially in low-interest-rate environments.

In a sign of continued institutional interest, Poland's central bank governor, Adam Glapinski, announced on Thursday that the country held 550 tons of gold at the end of 2025 and aims to increase its reserves to 700 tons.

Price Movements in Other Precious Metals

Other precious metals also saw price adjustments:

• Spot silver slid 0.3% to $92.50 per ounce after reaching an all-time high of $93.57 earlier in the session.

• Spot platinum fell 0.8% to $2,404.18 per ounce.

• Palladium held steady at $1,826.32 per ounce.