Gold Drops 1.5% on Strong Dollar Silver Bounces Back from Three-Week Low
Spotlight on Metals Market as Investors Eye Fed Policy under Warsh
Mumbai, Jan 02 : Gold extended losses on Monday, pressured by a firm U.S. dollar, while silver staged a modest recovery after hitting a three-week low on Friday.
Market Overview
Spot gold fell 1.5% to $4,793.97 per ounce, touching a one-week low, following last week’s record high of $5,594.82. U.S. gold futures for February delivery rose 1.6% to $4,818.10.
Silver gained 1.6% to $85.98 per ounce after a brief dip, having previously reached a record high of $121.64.
Platinum dropped 2% to $2,120.05 per ounce, while palladium declined 0.9% to $1,682.59.
Factors Driving the Market
A stronger dollar reduced the appeal of dollar-denominated metals for investors holding other currencies.
Market participants are assessing how U.S. President Donald Trump’s Fed chair pick, Kevin Warsh, might approach interest rate cuts and balance sheet management.
Friday’s U.S. economic data showed December producer prices rising at the fastest pace in five months, signaling potential inflationary pressures and the possibility of the Fed maintaining current rates for now.
Despite this, investors continue to price in at least two rate cuts in 2026, a factor supporting bullion as a hedge in low-interest-rate conditions.
The metals market remains sensitive to shifts in monetary policy expectations, with gold and silver reacting to both the dollar’s strength and anticipated Fed actions under Warsh.
