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.” (Reuters)
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. (Reuters)
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. (Reuters)
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).” (Reuters)
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. (Reuters)
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. (Investopedia)
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. (Federal Reserve)
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. (Federal Reserve)
