Gold Prices Fall From Record Highs as Tensions Cool

Gold and other precious metals declined on Thursday as demand for safe-haven assets weakened. The drop followed a U.S. presidential policy reversal that eased geopolitical tensions, while a strengthening dollar added further pressure on prices.

Precious Metals Lose Ground

After reaching a record high of $4,887.82 in the previous session, spot gold prices fell by nearly 1% to $4,793.63 per ounce as of 0332 GMT. U.S. gold futures for February delivery also dropped 1%, settling at $4,790.10 per ounce.

The downturn was not limited to gold:

• Spot Silver: Remained steady at $92.27 an ounce after hitting a record of $95.87 on Tuesday.

• Spot Platinum: Lost 1.8% to trade at $2,438.43 per ounce, down from its Wednesday record of $2,511.80.

• Palladium: Edged up slightly by 0.1% to $1,840.40.

Geopolitical Shifts and a Stronger Dollar

The primary catalyst for the price correction was President Donald Trump's decision to step back from threats of new tariffs and proposals to acquire Greenland. This move helped calm investor nerves and reduce the appeal of assets typically seen as a store of value during times of uncertainty.

"Reversal of comments by the U.S. President was one factor that eased geopolitical tensions, and so we see a retracement in prices," explained Soni Kumari, a commodity strategist at ANZ.

The news also boosted Wall Street indexes. Concurrently, the U.S. dollar firmed up, making dollar-denominated metals like gold more expensive for buyers using other currencies.

Focus Turns to Fed Policy and Economic Data

Market participants are now turning their attention to upcoming U.S. economic indicators, including November's Personal Consumption Expenditures (PCE) data—the Federal Reserve's preferred measure of inflation—and weekly jobless claims. These figures could provide clues about the future direction of monetary policy.

The Federal Reserve is widely expected to keep interest rates unchanged at its January meeting, despite calls from President Trump for rate cuts. Gold, as a non-yielding asset, generally benefits from a low-interest-rate environment.

Adding to the political landscape surrounding the central bank, U.S. Supreme Court justices have expressed skepticism regarding Trump's attempt to dismiss Federal Reserve Governor Lisa Cook, a case that has raised questions about the Fed's independence.

Despite the current price pullback, some analysts maintain a positive long-term view. "We still prefer gold as it has central bank backing while it also remains on firmer ground as compared to other industrially-exposed precious metals as geopolitical tensions still persist," Kumari added.

Reinforcing this outlook, Goldman Sachs raised its December 2026 gold price forecast on Thursday, increasing its target from $4,900 to $5,400 per ounce.