Gold prices fell more than 1% in the January 7 trading session as investors took profits after a recent strong rally. However, losses were partially pared after weaker-than-expected U.S. jobs data boosted expectations that the Federal Reserve will cut interest rates.
Spot gold slipped 0.9% to USD 4,445.32 per ounce. Earlier in the session, prices had fallen as much as 1.7% to a low of USD 4,422.89 per ounce.
U.S. gold futures for February delivery settled down 0.7% at USD 4,462.50 per ounce.
“We view today’s pullback mainly as routine profit-taking following the sharp rally we’ve seen recently,” said David Meger, Director of Metals Trading at High Ridge Futures.
However, Meger added that weakening labor market data continue to reinforce the case for Fed policy easing, a factor that has supported gold prices in recent weeks.
The number of job openings in the U.S. fell more sharply than expected in November after only a modest increase in October. Meanwhile, a separate report from ADP showed that private-sector job growth in December came in below expectations.
According to data compiled by LSEG, markets are currently pricing in a total of 61 basis points of Fed rate cuts this year. Attention now turns to the U.S. nonfarm payrolls report due on Friday.
Meanwhile, geopolitical uncertainty remains elevated after Venezuelan President Nicolás Maduro was arrested over the weekend. U.S. President Donald Trump on January 6 announced plans to refine and sell Venezuelan crude oil, while the White House also confirmed discussions over the potential acquisition of Greenland, including scenarios involving military considerations.
In a separate development, China’s central bank extended its gold-buying streak to a 14th consecutive month in December, according to official data.
“Data from China continue to show the very strong demand we are seeing in Asia… and that is yet another reason explaining why gold prices have just staged such a strong breakout,” Meger said.
Gold — a non-yielding safe-haven asset — typically benefits in a low interest rate environment and during periods of heightened uncertainty.
As for other precious metals, spot silver plunged 4.1% to USD 77.93 per ounce.
HSBC has raised its 2026 silver price forecast to USD 68.25, but warned that the market is likely to remain highly volatile as supply gradually improves. Meanwhile, Goldman Sachs said thin inventories in London could trigger sharp price swings and potential “short squeezes” that drive prices sharply higher before reversing lower.
Spot platinum fell 6.5% to USD 2,285.75 per ounce, while palladium declined 5.2% to USD 1,727.40 per ounce.
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