BY COMFORT OGBONNA
Gold and other precious metals eased on Thursday as investors stepped away from safe-haven trades, following a cooling of geopolitical fears after U.S. President Donald Trump walked back fresh tariff threats and distanced himself from proposals to annex Greenland by force. A stronger U.S. dollar added pressure across the metals complex, making dollar-priced commodities more expensive for overseas buyers and reducing immediate demand.
Spot gold fell 0.8% to $4,796.75 an ounce by 0524 GMT, retreating after climbing to a new all-time high of $4,887.82 in the previous session. U.S. gold futures for February delivery also slipped 0.8% to $4,799.90 an ounce, tracking the pullback in spot markets as traders locked in profits after the sharp rally.
Market analysts said the change in tone from Washington reduced the urgency for investors to pile into traditional havens. With tensions appearing to cool, prices that surged on fear-driven momentum began to retrace. The shift came after Trump unexpectedly stepped back from his earlier threats, including the idea of using tariffs as leverage in the dispute over Greenland.
He reportedly ruled out the use of force and suggested progress toward a deal to settle the standoff involving Denmark’s autonomous territory, easing fears of a major blow-up in transatlantic relations.
The calmer mood spilled into broader markets as the dollar strengthened and U.S. stocks pushed higher, reflecting improved risk appetite. For precious metals, the stronger greenback was an added headwind. Because gold and its peers are priced in dollars, any rise in the currency tends to curb demand from international buyers, often leading to softer prices even when fundamentals remain supportive.
Investors were also digesting fresh legal and policy uncertainty tied to the U.S. central bank. U.S. Supreme Court justices signaled skepticism toward Trump’s unusual attempt to remove Federal Reserve Governor Lisa Cook, a case being closely watched for what it could mean for the independence of the Fed. Any perception that the central bank’s autonomy could come under political pressure has the potential to reshape market expectations for rates, inflation control, and financial stability—factors that directly influence gold’s longer-term outlook.
Traders are now looking ahead to key U.S. economic releases later Thursday, including November Personal Consumption Expenditures (PCE) inflation data, the Fed’s preferred gauge, along with weekly jobless claims. Those reports could provide the next big clue on the direction of interest rates, especially after recent market swings driven by politics, risk sentiment, and inflation expectations.
Despite Trump’s public calls for interest-rate cuts, markets broadly expect the Federal Reserve to hold rates steady at its January meeting. Gold typically performs best when interest rates are low or falling because it doesn’t pay interest, meaning investors face less opportunity cost when holding it. Even with Thursday’s decline, many traders still view gold as supported by strong underlying demand, including buying from central banks and investors hedging against ongoing global uncertainty.
That longer-term optimism was echoed by a major Wall Street forecast update. Goldman Sachs raised its December 2026 gold price outlook to $5,400 an ounce from $4,900, reinforcing the idea that institutional expectations for higher prices remain intact even after short-term pullbacks.
Elsewhere in precious metals, spot silver dipped slightly, down 0.1% to $93.19 an ounce, after reaching a record high of $95.87 earlier in the week. Platinum slid nearly 2% to $2,433.50 an ounce, coming off a fresh peak of $2,511.80 set on Wednesday, while palladium fell 0.6% to $1,829.29. The broader retreat suggests that once the immediate fear premium faded, traders became more cautious and shifted to profit-taking after the latest historic highs.
While the short-term mood has turned calmer, investors remain alert. Inflation data, rate expectations, currency moves, and political headlines continue to shape the precious-metals market—and any renewed shock could quickly revive safe-haven demand.
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