Gold prices experienced a minor decline on Friday, influenced by a strengthening US dollar, yet the precious metal remains on track for its most significant monthly gain in over four decades. This remarkable performance underscores gold's enduring appeal as a safe-haven asset during times of global uncertainty.
Current Market Movements
Spot gold was down 0.9% at $5,346.42 per ounce as of 0124 GMT, following a record high of $5,594.82 reached the previous day. Despite this daily dip, the overall trend for January has been overwhelmingly positive, with prices surging more than 24% so far this month. This marks the sixth consecutive month of gains and the largest monthly advance since January 1980, highlighting a sustained bullish momentum in the gold market.
Factors Influencing Gold's Performance
The dollar index edged higher, partly supported by the Federal Reserve's decision to leave interest rates unchanged on Wednesday. However, the dollar is poised for a second straight weekly decline, which typically benefits gold priced in US dollars. Fed Chair Jerome Powell noted that inflation in December likely remained well above the central bank's 2% target, adding to economic concerns that drive investors toward gold.
Geopolitical tensions, particularly involving Iran, have also fueled demand for safe-haven assets. Reports indicate that US President Donald Trump is considering targeted strikes against Iran, which could escalate regional conflicts. Additionally, US economic data showed a drop in weekly initial jobless claims, suggesting low layoffs, but soft hiring has kept consumer sentiment pessimistic about the labor market, further bolstering gold's appeal.
Other Precious Metals and Market Insights
In related markets, US gold futures for February delivery climbed 1.3% to $5,390.80 per ounce on Friday. Spot silver was down 0.2% at $115.83 an ounce, after hitting a record high of $121.64 on Thursday. Silver has gained an impressive 62% this month, on track for its best-ever monthly performance, reflecting broader strength in precious metals.
Spot platinum lost 0.9% to $2,606.15 per ounce after reaching a record $2,918.80 on Monday, while palladium rose 0.5% to $2,016.69. These movements indicate varied trends within the precious metals sector, with gold and silver leading the charge.
Export Data and Price Forecasts
Gold exports from Switzerland rose 27% month-on-month in December, with shipments to Britain jumping to their highest level since August 2019, according to Swiss customs data. This increase in exports signals robust global demand for gold.
Financial institutions are adjusting their forecasts in response to this strong demand. UBS has raised its gold price target to $6,200 per ounce for March, June, and September 2026, up from a prior forecast of $5,000. This revision cites stronger-than-expected demand driven by increased investment inflows into gold as a hedge against economic and geopolitical risks.
Overall, while short-term fluctuations due to dollar strength may occur, gold's long-term outlook remains bullish, supported by ongoing uncertainties and heightened investor interest. The metal's performance in January 2026 sets a historic precedent, reinforcing its status as a critical asset in volatile times.
