Gold Holds Biggest Loss Since December on Concerns Rally Overdone
Gold steadied after its biggest one-day drop in two months, with the decline fueled by investor concerns that the metal’s recent record-breaking rally may be overdone.
Bullion was trading near $2,886 an ounce, after falling 1.6% on Friday. The 14-day relative strength index — a gauge of the speed and intensity of moves — showed gold had reached overbought levels earlier in the week. Traders have also been studying the Federal Reserve’s interest rate trajectory along with the risk of market disruption from U.S. President Donald Trump’s tariff threats.
Speculation has grown that the threats are primarily being used as a negotiating tool by Trump. His administration’s tariff policies have been increasingly muddled by delays and exceptions, with geopolitical and economic uncertainty likely to add to bullion’s appeal as a safe-haven asset.
Traders are also studying the latest U.S. economic data for clues on the Fed’s likely easing path, after a report on Friday showed retail sales fell by the most in nearly two years. The figures prompted traders to abandon bets that the central bank would cut interest rates in September. Lower borrowing costs usually benefit gold, since it doesn’t pay interest.
Money managers cut their bullish bets on gold to a four-week low in the week to Feb. 11, the latest Commodity Futures Trading Commission report showed on Friday.
Despite Friday’s fall, gold still posted its seventh straight weekly gain, the longest winning streak since 2020. That was helped in part by continued buying from central banks including China, along with rising holdings in bullion-backed exchange-traded funds.
Bullion hit a record high of $2,942.68 an ounce on Tuesday. Spot gold edged up 0.1% to $2,886.23 an ounce as of 8:16 a.m. in Singapore, after a weekly gain of 0.8%. The Bloomberg Dollar Spot Index was steady. Silver fell. Palladium and platinum rose.
Source: Bloomberg
