Gold price sees strongest month since 1980s but slips amid Fed chair bets

Gold prices have surged more than 20% throughout January

Gold prices have shot up by about 70% over the past year (Alamy/PA) (Alamy/PA)

Gold prices slid over 4 per cent on Friday, driven by market rumours of a potentially more hawkish Federal Reserve chair. Despite this, the precious metal is still set for its strongest monthly gain since 1982, as investors flock to the safe haven amidst persistent geopolitical and economic strains.

Spot gold lost 4.2 per cent, reaching $5,172.80 per ounce, as of 07:16 GMT, after falling more than 5% earlier. It ‌scaled a record high of $5,594.82 on Thursday.

Overall, prices have surged more than 20% throughout January, positioning the commodity for its sixth consecutive monthly rise and its largest single-month advance in over four decades. US gold futures for February delivery also fell 3% to $5,163.90 per ounce on Friday.

So, a potentially less ‍dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal," KCM Chief Trade Analyst Tim Waterer said.

Gold is still set for its strongest monthly gain since 1982. (Alamy/PA)

U.S. ⁠President Donald Trump said on Thursday he intends to announce his pick to replace Fed Chair ‍Jerome Powell on Friday, with speculation intensifying that the nod will go to former Fed Governor Kevin Warsh.

"Rumours ‌that ‌Kevin Warsh will replace Jerome Powell as Fed Chair have weighed on gold during Asian trade," said Matt Simpson, a senior analyst at StoneX.

The dollar recovered from multi-year lows, supported in part by the Fed's decision on Wednesday to leave interest rates unchanged, but was poised for a ⁠second straight weekly decline.

A ⁠stronger dollar makes ​greenback-priced gold more expensive for overseas buyers. Markets still expect two interest rate cuts in 2026.

Gold exports from Switzerland to the UK, home to the world's largest over-the-counter gold trading hub, jumped to their highest since ‍August 2019, customs data showed on Thursday.

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The Hang Seng Gold ETF surged more than 9% on its trading debut in Hong Kong in the previous session.Spot silver slipped 6.1% to $109.03 an ounce, after hitting a record high of $121.64 on ​Thursday. The metal has surged 53% so far this month, ‍on track for its best-ever monthly performance.

Spot platinum lost 7.1% to $2,443.65 per ounce after hitting an all-time high of $2,918.80 on ​Monday, while palladium dropped 7.3% to $1,860.0.