Gold prices edged lower at the start of the week after touching historic highs, as investors booked profits and the U.S. dollar strengthened modestly. Despite the pullback, broader fundamentals—including expectations of U.S. interest-rate cuts and persistent geopolitical uncertainty—continue to support precious metals markets.
Spot gold slipped 0.4% to $4,513.55 per ounce, retreating from Friday’s record of $4,549.71, while U.S. February gold futures declined 0.3% to $4,536.80. The move reflects short-term positioning rather than a shift in long-term sentiment, as bullion remains one of the strongest-performing assets of 2025.
Rate-Cut Bets Keep Gold Near Historic Highs
Gold’s rally has been largely driven by growing confidence that the U.S. Federal Reserve will ease monetary policy further in the coming year. Markets are increasingly pricing in a faster and deeper rate-cut cycle in 2026 as inflation indicators continue to cool.
Lower interest rates typically benefit gold by reducing the opportunity cost of holding non-yielding assets. At the same time, a softer dollar environment has added support, making gold cheaper for non-U.S. buyers.
So far in 2025, gold prices are up more than 72%, marking one of the strongest annual performances in decades. Analysts point to several reinforcing drivers behind this surge:
- Heavy central bank gold purchases, particularly from emerging markets
- Strong inflows into gold-backed exchange-traded funds (ETFs)
- Persistent geopolitical instability across key regions
- Rising demand for protection against currency volatility and macro risk
Together, these factors have kept investor interest elevated even during short-term pullbacks.
Geopolitics and Profit-Taking Cool Momentum
Monday’s modest decline followed renewed profit-taking after U.S.-led diplomatic efforts to end the war in Ukraine failed to deliver a decisive breakthrough. While any durable peace agreement could reduce demand for safe-haven assets, markets currently see no immediate resolution.
As a result, geopolitical risk remains a structural support for bullion rather than a fading influence. Traders appear cautious, locking in gains while waiting for clearer signals on diplomacy, inflation, and central bank policy.
Silver, Platinum, and Copper Extend Record Runs
Other metals continued to outperform, underscoring broad strength across the commodities complex.
- Silver surged to a record $83.62 per ounce, supported by both safe-haven demand and strong industrial usage
- Platinum touched a peak of $2,478.50, before easing slightly, aided by supply tightness and improving automotive demand
- London copper jumped nearly 7% to $12,937.90 per ton, after briefly hitting $12,966.25
- U.S. copper futures rose above $5.90 per pound
Silver’s dual role as an industrial and investment metal has made it especially resilient, while copper’s rally reflects expectations of sustained infrastructure and electrification demand.
