Gold prices fell to near the 4,900 USD/ounce mark in the context that most Asian markets closed for the Lunar New Year holiday, while silver prices also turned down.
Spot gold prices at one point fell by 2.7% on Tuesday, hitting the lowest level of the day for more than a week. This development continued the 1% decline in the previous session.
The precious metal has gone through a long-term strong upward cycle, accelerating significantly in January before experiencing a sudden sell-off at the end of the month. From a peak of over 5,595 USD/ounce, gold prices plummeted to nearly 4,400 USD in just two days. Since then, gold has partially recovered, but price fluctuations are still at a high level.
Strong retail demand in China and India – the world's largest physical gold markets – is a key factor supporting prices in recent months.
India's import data shows that gold and silver imports in January nearly reached a record level. The country imported more than 12 billion USD of gold during the above period, the third highest monthly level ever. Silver imports also surged, exceeding the 2 billion USD mark.
In the opposite direction, many large banks including BNP Paribas SA, Deutsche Bank AG and Goldman Sachs Group Inc. predict that gold prices will soon resume the upward trend, as the foundational factors that once supported the upward momentum are still present.
We continue to see two key macroeconomic factors supporting gold: inflation and the weakening of the USD," Jefferies analysts, including Fahad Tariq, wrote in a report, while raising their 2026 gold price forecast to $5,000/ounce from $4,200 previously. According to this group, investors and central banks are concerned about the above risks "almost only one option: tangible assets".
The US interest rate roadmap continues to be the focus of attention after inflation data released on Friday was lower than expected. The US market will reopen at the end of Tuesday after the President's Day holiday, while traders are waiting for the minutes of the January meeting of the US Federal Reserve (Fed), expected to be released on Wednesday, to have more clues about economic prospects.
In other precious metals markets, silver prices once plummeted by 5% on Tuesday before narrowing their decline. Silver is inherently more volatile than gold due to its small market size and low liquidity. However, recent developments, considered the strongest volatility since 1980, still attract attention due to their scale and pace of decline.
Spot gold prices fell 1.3% to $4,894.46/ounce. Silver fell 2.8% to $74.49/ounce. Platinum and palladium also went down simultaneously. The Bloomberg Dollar Spot index – a measure of the strength of the USD – rose 0.1%.
