Gold falls over 1% as profit‑taking, easing geopolitical risks weigh

Synopsis

Gold prices dropped on Friday after reaching record highs. Investors took profits as geopolitical tensions eased, reducing gold's safe-haven appeal. Despite the dip, gold is set for its second consecutive weekly gain. Silver also saw a decline after hitting an all-time high. Analysts suggest gold could still reach $5,000 this year, with corrections expected.

Gold fell more than 1% on Friday as investors booked profits after recent record highs, while signs of easing geopolitical tensions further dampened the metal's safe-haven appeal.

Spot ‌gold was ‌down 0.5% at $4,592.29 per ounce as of 01:39 p.m. ET (1839 GMT), after falling as low as $4,536.49 earlier in the session.

However, the ‌metal is poised for its second consecutive weekly gain, of about 1.9%, after scaling a record peak of $4,642.72 on Wednesday.

U.S. gold futures for February delivery settled 0.6% lower at $4,595.40.

"It's a general retreat in the commodity complex after weeks of aggressive gains, with some profit-taking. The de-escalation of Middle East tensions has also removed some of the geopolitical premium in gold and other metals, especially silver," said Marex analyst Edward Meir.

Geopolitical ‌tensions appeared ‍to ease as protests in Iran subsided, while U.S. President Donald ‍Trump took a wait-and-see approach and Russia's President Vladimir Putin moved ‌to mediate in Iran and de-escalate the situation.

On the trade front, the U.S. and Taiwan struck a deal on Thursday that lowers tariffs on many of Taiwan's semiconductor exports and channels new investments into U.S. tech, and risks infuriating China.

Meanwhile, the Federal Reserve is expected to keep rates unchanged through the first half of the year, with a first 25-basis-point cut projected in June, as per data compiled by LSEG.

Safe-haven gold ‍tends to do well during times of geopolitical and economic uncertainty, as well as when interest rates are low.

"I still think we have a ‍chance of getting ⁠to $5,000 sometime this year, punctuated ⁠with these big corrections in the meantime," Meir said.

Spot silver shed 2.9% to $89.65 per ounce, although it was headed for a weekly gain of over 12% after hitting an all-time high of $93.57 in the previous session.

JP Morgan said in a note on Friday that mounting risks from loosening ex-U.S. supply and ETF outflows to softer industrial demand and tighter Chinese trading curbs, leave silver vulnerable to a sharp correction.

Spot platinum dropped 3.3% to $2,330.67 per ounce and headed for weekly gain, while palladium lost 0.6% to $1,790.78 per ounce.

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