DBT Bureau
Pune, 5 Feb 2026
Gold and silver prices came under sharp pressure on Thursday as renewed selling emerged after the Federal Reserve signaled caution on further rate cuts. Gold slipped more than 2%, erasing recent recovery gains, while silver plunged over 16%, reflecting extreme volatility across precious metals. Hawkish comments from Fed officials and President Trump’s nomination of Kevin Warsh as the next Fed chair strengthened the US dollar and dampened rate-cut expectations. Although weaker US jobs data keeps hopes of eventual easing alive, easing geopolitical tensions around US–Iran talks reduced immediate safe-haven demand.
Key Highlights
• Gold drops over 2%, silver tumbles 16.5% amid renewed selling pressure
• Hawkish Fed commentary and Warsh nomination lift US dollar sentiment
• Markets reprice for slower pace of US rate cuts despite weak ADP data
• Geopolitical risk premium eases ahead of US–Iran nuclear talks
• China reports lower gold consumption even as domestic output rises
Precious metals witnessed sharp losses on Thursday, with gold and silver retreating after a brief rebound earlier in the week. Gold prices fell more than 2% to around $4,840 per ounce, giving up gains from a two-day recovery that had been fueled by aggressive dip-buying. Silver faced even heavier pressure, plunging as much as 16.5% to near $73.5 an ounce, underscoring the heightened volatility gripping the metals complex.
The immediate trigger for the selloff was renewed hawkish sentiment from the US Federal Reserve. Fed Governor Lisa Cook emphasized that persistent upside inflation risks outweigh signs of labor-market cooling, signaling limited appetite for near-term rate cuts. Adding to the pressure, President Donald Trump’s nomination of Kevin Warsh as the next Fed chair was interpreted by markets as a tilt toward a less dovish policy stance. Warsh is widely viewed as favoring tighter financial conditions and a smaller Fed balance sheet, helping the US dollar extend its gains.
That said, the broader policy outlook remains mixed. Trump clarified that he would not have nominated Warsh if he supported rate hikes and reiterated confidence that the Fed will eventually cut rates. Weak US data reinforced that view, with ADP reporting just 22,000 private-sector jobs added in January, well below expectations. However, steady expansion in the ISM Services PMI provided some support to the dollar, limiting gold’s appeal.
On the geopolitical front, safe-haven demand eased slightly after the US and Iran agreed to hold talks in Oman, though tensions remain unresolved. Meanwhile, China reported a 3.57% drop in gold consumption in 2025, even as domestic output edged higher, adding another layer of complexity to the demand outlook.
Overall, precious metals remain highly sensitive to Fed signals, dollar strength, and geopolitics, suggesting continued volatility as markets reassess the timing and pace of US rate cuts.
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