Gold and Silver Retreat from Record Highs

Gold and silver futures pulled back Thursday after both metals reached record highs in the prior session, this as easing geopolitical tensions and profit-taking combined to cool safe-haven demand.

Gold futures in New York fell 0.29% to $4,620.50 a troy ounce, holding above the $4,600 level after trimming deeper losses from morning trade. Silver retreated more sharply, with futures down 0.83% to $92.39 an ounce after tumbling as much as 4.5% earlier in the session. As of 6:50 PM EST February gold futures are fixed at $4313.10, and silver March futures are fixed at $90.625

The pullback followed a marked reduction in geopolitical tail risks. President Trump signaled a softer stance on Iran after U.S. officials advised that a large-scale military strike would be unlikely to topple the government and could spark a wider regional conflict. Trump said he would monitor Tehran’s handling of protesters before determining the scope of any potential action and indicated he had been assured that executions of demonstrators had stopped.

A slight easing in geopolitical tensions has helped temper immediate safe-haven demand said Konstantinos Chrysikos, Head of Customer Relationship Management at Kudotrade, in an email. He noted that some investors opted to lock in profits amid the reduced risk premium.

Supply-side concerns also diminished after Trump decided to hold off on imposing new tariffs on critical mineral imports, opting instead to pursue negotiated supply agreements. While the White House kept the option of future import restrictions open if talks fail, the softer policy tone reduced fears of near-term supply disruptions that had fueled the recent rally.

Adding to near-term headwinds, U.S. initial jobless claims fell sharply to around 198,000, with continuing claims near 1.884 million. The data reinforced signs of a resilient labor market and tempered urgency for near-term Federal Reserve easing, weighing on non-yielding assets like gold.

However, the medium-term outlook remained supportive. November PPI surprised to the downside and core prices stalled, consistent with a tame December CPI reading that keeps expectations for multiple Fed cuts later this year intact.

Sentiment was further stabilized by Trump’s softer tone toward Fed Chair Jerome Powell. In an interview with Reuters, the president said he has no plans to remove Powell despite a Justice Department criminal investigation, alleviating concerns about potential interference with monetary policy.

According to John Caruso of RJO Futures, “Despite Thursday’s pullback, the longer-term case for precious metals remains intact. A firmer U.S. dollar pressured prices in the session, but the greenback’s broader trend points lower, which should support renewed gains in gold and silver.”

Wishing you as always good trading,