London, Feb 2, 2026, 11:09 GMT — Regular session
Gold slipped once more on Monday, with spot prices dropping 3.2% to $4,708.19 an ounce by 1008 GMT. Tighter margin requirements and a firmer dollar weighed heavily on the bulls.
This move is crucial as it comes after last week’s record highs took a sharp hit, pushing leveraged traders to scramble for cash or slash their positions. That scramble can quickly turn a downturn into a full-blown stampede.
Selling has spread beyond bullion. Commodities and stocks dropped after U.S. President Donald Trump announced former Federal Reserve governor Kevin Warsh as his pick to replace Jerome Powell as chair in May, boosting the dollar and shifting the rate outlook. “Investors view Warsh as more hawkish,” said Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia. Reuters
Gold has dropped roughly $900 from its record peak of $5,594.82 on Jan. 29, wiping out most gains made this year. Earlier Monday, the metal plunged nearly 10% before recovering some losses. U.S. gold futures for April delivery slid 0.3% to $4,730.40. Spot silver tumbled 3.4% to $81.65, with platinum and palladium also falling. Zain Vawda, analyst at MarketPulse by OANDA, pointed to rising margin demands as a “feedback loop,” where falling prices spark margin calls that lead to further selling. Reuters
Margins represent the cash collateral traders need to post to maintain futures positions. A CME clearing notice from Jan. 30 revealed that initial and maintenance margins for COMEX 100-ounce gold futures jumped to 8% from 6% for non-HRP positions in the near months.
Even as prices slide, some banks remain bullish on gold’s medium-term outlook. JPMorgan projects that central-bank and investor demand will push gold to $6,300 an ounce by year-end. It also anticipates central banks will buy 800 tons in 2026.
The downside risk is clear. A stronger dollar could push more players to the sidelines, sending bullion tumbling once more—especially if liquidity dries up and stop orders get triggered.
Right now, traders are trying to see if the selling is purely mechanical — pushed by margin calls and strict rules — or if it’s signaling a genuine drop in demand. The distinction can get blurry fast.
Coming up, U.S. January payrolls hit Friday’s agenda, alongside the Fed’s minutes from its Jan. 27-28 meeting set for Feb. 18. Both have the potential to shift rate-cut expectations—and with them, the dollar and gold.
