Gold prices fell more than 1% on Wednesday, retreating from recent highs as investors engaged in profit booking. Spot gold dropped to $4,452.97 per ounce, while U.S. futures slipped 0.8%. Despite the decline, softer U.S. payroll data bolstered expectations of Federal Reserve rate cuts, cushioning deeper losses.
After a stellar rally that saw gold end 2025 with its biggest yearly gain since 1979 (up 64.4%), the precious metal witnessed a sharp correction this week. Spot gold fell as much as 1.5% intraday to $4,427.39 per ounce, before recovering slightly to settle at $4,452.97.
Analysts attributed the decline to profit-taking by investors following the surge in prices. David Meger, Director of Metals Trading at High Ridge Futures, noted that the pullback was “general profit booking after the recent surge.”
Interestingly, weaker-than-expected U.S. private payroll data for December supported hopes of Fed rate cuts, preventing a steeper fall. Domestic markets mirrored the trend, with MCX gold futures slipping 0.76% to ₹1,35,618 per 10 grams, while silver saw a sharper correction, plunging over 6% to ₹2,32,228 per kg.
Notable Updates and Major Takeaways
Spot gold: Fell 1% to $4,452.97/oz; intraday low $4,427.39.
U.S. futures: Down 0.8% at $4,459.
Domestic MCX gold: Dropped 0.76% to ₹1,35,618/10g.
Silver crash: Fell over 6% to ₹2,32,228/kg.
Macro factor: Weak U.S. payroll data bolstered Fed rate cut bets.
2025 rally: Gold surged 64.4% last year, strongest since 1979.
Conclusion
The correction highlights the volatility in precious metals after record gains. While profit booking triggered the fall, macroeconomic signals—especially Fed policy expectations—will continue to shape gold’s trajectory in early 2026.
Sources: Economic Times, Livemint, GoldSilver Reports