New York, Jan 16, 2026, 14:24 EST — Regular session underway.
- Spot gold dipped following a fresh record earlier this week, with some investors cashing in their profits
- Middle East tensions easing cut into safe-haven demand, though gold still managed to climb over the week
- After Monday’s U.S. market holiday, traders are turning their attention to the Fed’s meeting scheduled for late January
Gold slipped over 1% on Friday as investors locked in gains following a surge to record levels, with easing geopolitical tensions undercutting demand for safe-haven assets. Spot gold dropped 0.5% to $4,592.29 an ounce by 1:39 p.m. ET, after hitting a low of $4,536.49 earlier. February U.S. gold futures closed 0.6% lower at $4,595.40. Marex analyst Edward Meir noted a broad pullback across commodities after weeks of strong gains, pointing out that reduced conflict in the Middle East had pared back some of gold’s “geopolitical premium.” 1
The pullback is notable given how quickly and broadly the rally unfolded. Gold soared to a record $4,642.72 on Wednesday and was on track for a second weekly gain. That rapid rise has traders wary of sudden swings if rates or risk sentiment shift. 1
Geopolitical tensions remained in focus. Reuters noted that protests in Iran had eased, while U.S. President Donald Trump adopted a “wait-and-see” stance. Meanwhile, Russian President Vladimir Putin stepped in to mediate—moves traders interpreted as easing near-term tail-risk. 1
Physical demand showed signs of strain at these price points. In India, dealers were slashing up to $12 an ounce off official domestic prices, with one dealer describing jewellery demand as “pretty much dead.” Meanwhile, in China, premiums varied—sometimes dipping into discounts but climbing to modest premiums of around $3—as buying held steady through the Lunar New Year season. Independent analyst Ross Norman noted, “Despite the record prices, gold remains at a modest premium, (which is surprising).” 2
Rate expectations took center stage as Fed Vice Chair for Supervision Michelle Bowman noted Friday that the central bank must remain prepared to cut rates again if a “fragile” job market deteriorates. She warned against signaling a pause prematurely, stressing that clear signs of changing conditions are needed first. 3
Liquidity will be a factor next week. U.S. stock and bond markets shut down Monday, Jan. 19, for Martin Luther King Jr. Day, reopening for normal trading on Tuesday. 4
Gold now faces a brief lead-up to the Fed’s next big policy event: the Jan. 27-28 meeting. Investors are gearing up to dissect the statement and any changes in guidance on how long restrictive rates might last. 5
Bulls still face plenty of risks. Should geopolitical tensions ease and U.S. interest rates remain elevated longer than expected, gold might undergo a sharper pullback from its record highs. Prices are already elevated enough to weigh on retail demand in major consuming regions.
Traders face two major upcoming events: Tuesday’s full return of U.S. market liquidity post-holiday and the Fed meeting on Jan. 27-28. Positioning will likely remain jittery around every data release that could tweak the rate outlook. 5
