Gold Falls Over 4% After Reports of Tougher Fed Leadership

Gold prices tumbled sharply on Friday amid rumours that US President Donald Trump may appoint a more hawkish chair to lead the Federal Reserve, triggering a pullback across precious metals after a historic rally earlier this month.

Spot gold dropped more than 4 percent, falling to $5,232.57 per ounce by 0520 GMT after briefly plunging over 5 percent. The metal had hit a record high of $5,594.82 just a day earlier. Despite the decline, gold remains on course for its strongest monthly gain since 1980, up more than 20 percent in January and marking a sixth consecutive monthly advance.

US gold futures for February delivery slipped 1.8 percent to $5,225 per ounce.

Analysts said the sell-off was driven by speculation that the next Fed chair could take a tougher stance on interest rates, alongside a rebound in the US dollar and signs that gold had become overbought.

Trump said he plans to announce his nominee to replace Fed Chair Jerome Powell, with markets increasingly betting on former Fed Governor Kevin Warsh. The dollar bounced from multi-year lows after the Federal Reserve left rates unchanged earlier this week, though it remains on track for a second weekly decline.

A firmer dollar typically pressures gold by making it more expensive for non-US buyers, even as markets continue to price in two interest-rate cuts in 2026.

Elsewhere, Swiss gold exports to the UK surged to their highest level since August 2019, while Hong Kong’s newly launched Hang Seng Gold ETF jumped more than 9 percent on its trading debut.

Silver and other precious metals followed gold lower. Spot silver fell 3.6 percent to $111.99 an ounce after touching a record $121.64, though it remains up 56 percent this month. Platinum slid 3.7 percent to $2,531.84 after hitting an all-time high earlier in the week, while palladium dropped 4 percent to $1,925.50.