Gold prices steadied in early Asian trade on Monday following a heavy sell-off in precious metals markets at the end of last week. The turmoil came as investors digested a suite of factors that included profit-taking, lingering questions about U.S. monetary policy and a rebound in the dollar.
Spot gold was up 0.2% at $4,870.68 an ounce by 19:23 ET (00:23 GMT). Meanwhile, April gold futures climbed nearly 3% to $4,886.31 per ounce. The corrective move followed a dramatic one-day drop on Friday, when spot gold relinquished almost 10% of its value and slid back from a record peak near $5,600 per ounce recorded earlier in the week.
Other precious metals also recovered ground after deep declines. Spot silver rose nearly 4% to $87.7095 per ounce, and spot platinum held steady at $2,159.79 per ounce.
Market participants said the rout was partially triggered by U.S. President Donald Trump nominating Kevin Warsh as the next Chairman of the Federal Reserve, after Jerome Powell’s term ends in May. That nomination removed a prominent source of uncertainty for investors, cutting into some of gold's appeal as a safe-haven asset and encouraging profit-taking after prices ran to near-record highs.
At the same time, markets expressed concern that Warsh could prove hawkish over time. Although the nominee - who previously served as a Fed governor - has been aligned with calls for sharply lower interest rates, he has also been critical of the Fed’s asset purchase programs. Those mixed signals left some investors reassessing positions in metals.
“Warsh is considered the toughest on inflation among the candidates for the role, lessening the likelihood of a dramatic easing of monetary policy. This triggered a wave of selling, with gold suffering its biggest slide in four decades,” ANZ analysts wrote in a note. They added that the declines were exacerbated by “some extreme positioning in options markets,” which had built up during gold’s strong run through late-2025 and early-2026.
The dollar recovered from a recent four-year low after the nomination announcement, creating additional headwinds for metal prices.
Despite the losses at the end of the week, gold remained substantially higher for the month, finishing January up nearly 15% as geopolitical uncertainty had previously supported haven demand for the metal.
Market context and short-term outlook
The nomination of a new Fed chair serves as a focal point for investors assessing the likely path of U.S. monetary policy. In this instance, the clearing of that uncertainty lessened immediate safe-haven buying in gold, while lingering questions about the nominee's stance on inflation and balance-sheet tools continued to influence positioning across options and futures markets.
Traders will likely continue to watch dollar movements and any further commentary about monetary policy and asset purchases closely, as both remain key variables for precious metals pricing in the near term.