NEW YORK, Jan 17, 2026, 12:45 PM EST — Market closed.
- Spot gold dipped following a recent surge to record highs, yet managed to secure a second consecutive weekly advance.
- Traders attributed the moves to profit-taking and a thaw in geopolitical tensions, while bets on rate cuts have grown more cautious.
- With the U.S. holiday approaching, liquidity may dry up, making gold more reactive to moves in the dollar and yields.
Gold dropped more than 1% on Friday as investors cashed in following a sharp rally to record highs, with easing geopolitical tensions cutting into the metal’s safe-haven appeal. Spot gold slipped 0.5% to $4,592.29 an ounce by 1:39 p.m. ET, after touching a low of $4,536.49. U.S. gold futures closed down 0.6% at $4,595.40. Still, bullion gained roughly 1.9% for the week, having hit $4,642.72 on Wednesday. “The de-escalation of Middle East tensions has also removed some of the geopolitical premium,” said Edward Meir, analyst at Marex. 1
This pullback is crucial because gold’s recent surge has been driven largely by bets that U.S. borrowing costs have peaked for this cycle. When the dollar strengthens and Treasury yields creep higher, gold often takes a hit—after all, it doesn’t offer any yield.
Federal Reserve Vice Chair Philip Jefferson indicated Friday he’s ready to keep rates steady at the Fed’s upcoming late-January meeting. He said the current policy puts officials “well positioned” to determine the “extent and timing” of any future adjustments. The Fed’s target range remains at 3.50%-3.75%, with markets assigning just a slim probability to a rate cut this month. 2
U.S. data haven’t exactly cleared a path for gold bulls. Weekly initial jobless claims dropped by 9,000 to 198,000 in the latest report, but economists flagged the potential for distortion due to year-end seasonal adjustments. Nancy Vanden Houten, lead U.S. economist at Oxford Economics, described the claims data as showing “at least stable labor market conditions.” Yet Citigroup’s Gisela Young noted claims often “bottom in January” before rising again. On the inflation front, traders are eyeing the upcoming core PCE inflation figure— the Fed’s favored metric — expected to nudge up 0.2% in November. The release was delayed by the federal shutdown and is now due next week. 3
Trade news is stirring the markets as Washington and Taipei struck a deal slashing tariffs on numerous Taiwanese exports. The agreement also includes $250 billion in Taiwanese investment targeting U.S. semiconductors, energy, and AI sectors. This could prolong tensions around tariffs and geopolitical risks amid the ongoing inflation debate. 4
In U.S. markets, the bullion-backed SPDR Gold Shares ETF last traded at $421.29, slipping roughly 0.5% from its previous close — a snapshot of paper gold demand following the late-week drop.
The calendar is tricky. U.S. stock markets shut Monday for Martin Luther King Jr. Day, which can magnify moves when trading volume dries up and news breaks. 5
Gold futures on CME Globex follow a holiday schedule over the weekend and into Monday, with adjusted hours during the MLK period. This can change both the timing and location of price discovery. 6
The downside is clear: should U.S. data remain strong and investors continue scaling back rate-cut expectations, the dollar and yields could climb further, triggering a sharper pullback from record highs. On the flip side, any fresh geopolitical tensions could swiftly draw safe-haven demand back into the market.
The next major event to watch is the Fed’s January policy meeting, set for Jan. 27-28. The rate decision and press conference will take place on Jan. 28 in Washington. 7
