Gold falls as investors take profits after record high

Gold fell on Thursday (Jan 29) as investors took profits after a record high, yet prices remained on course for their best month since the 1980s amid heightened economic and geopolitical uncertainty.

Spot gold was 1.3 per cent lower at US$5,330.20 (S$6,752.30) an ounce by 1.30pm ET (2.30am on Friday Singapore time).

The metal reversed course, falling more than five per cent to a session low of US$5,109.62 after touching a record high of US$5,594.82 earlier in the session.

US gold futures for February delivery settled 0.3 per cent lower at US$5,318.40.

"We are seeing a dramatic sell-off after precious metals made new recent all-time highs," said David Meger, director of metals trading at High Ridge Futures.

However, spot gold prices are still up about 24 per cent for the month and seven per cent so far this week.

UBS on Thursday raised its gold price forecast to US$6,200 for the first three quarters of the year, while projecting it to decline to US$5,900 by the end of 2026.

From crypto money to central banks, demand for gold is widening as "precious metals are well in the limelight and investors always like to go where they can get high returns," said GoldSilver Central managing director Brian Lan.

Adding to geopolitical uncertainty, US President Donald Trump on Wednesday pressed Iran to negotiate a nuclear deal, while Tehran threatened retaliation against the US, Israel, and allies.

On Wednesday, crypto-group Tether's CEO said it plans to allocate 10 per cent-15 per cent of its investment portfolio to physical gold, while the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, saw holdings at a nearly 4-year high.

The US Federal Reserve left rates unchanged on Wednesday, as investors awaited Trump's announcement of a replacement for central bank chair Jerome Powell, whose term ends in May. Markets expect the central bank to next trim rates in June.

Spot silver lost 2.1 per cent at US$114.141 an ounce after reaching US$121.64. It has surged more than 60 per cent so far this month, fuelled by supply deficits and momentum buying.

The silver, platinum and palladium markets are small relative to gold or the S&P 500, making them vulnerable to speculative inflows that have left prices "totally detached from where physical demand is robust," said Guy Wolf, global head of market analytics at Marex.

Spot platinum fell 3.2 per cent to US$2,602.85 an ounce, having hit a record high of US$2,918.80 on Monday, while palladium dropped 3.7 per cent to US$1,996.65.

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