Gold Retreats from Key Area, Risk-Off Sentiment Returns
Gold prices weakened ahead of the European session on Thursday (February 5, 2026) after the recovery rally over the past few days began to "run out of gas" and the market re-entered risk-off mode. Pressure came from a combination of a strengthening dollar and profit-taking following the extreme volatility that has occurred since last week.
In recent trading, spot gold fell around 2.5% to $4,838.81/ounce, while US gold futures fell 1.9% to $4,855.60/ounce. This decline occurred as many traders chose to reduce their exposure to precious metals amidst still-wild price movements and relatively thin liquidity.
One of the main drivers of today's weakness was the strengthening of the US dollar as the market sought safe haven assets and awaited a series of central bank decisions (ECB/BoE). When the dollar rises, gold is usually under pressure because it becomes more expensive for non-dollar buyers. From a geopolitical perspective, US-Iran tensions remain a major theme, but confirmation of planned talks has led some markets to view the risk of military escalation as "slightly easing" in the very short term. The effect: the safe-haven push for gold is less strong than yesterday, making it more susceptible to corrections when the dollar strengthens.
Furthermore, the market is still weighing changes in Fed policy expectations related to political dynamics and central bank leadership nominations. This uncertainty tends to cause rapid fluctuations in capital flows—today leaning toward the dollar, tomorrow shifting back to gold—so gold prices remain vulnerable to sharp fluctuations.
In conclusion, ahead of today's European session, gold remains in a phase of intense consolidation following its historic decline: influenced by the dollar, geopolitical headlines, and global risk sentiment. As long as the market lacks a clear catalyst (either from US data or central bank policy direction), gold's movement has the potential to remain volatile with rapid fluctuations. (asd)
Source: Newsmaker.id
