Gold prices fell more than 1% on Wednesday as investors locked in profits after a strong recent rally, though losses were pared as weaker-than-expected U.S. labor market data reinforced expectations that the Federal Reserve will begin cutting interest rates this year.
Spot gold was down 0.9% at $4,445.32 per ounce by 1:36 p.m. ET (1836 GMT), after sliding as much as 1.7% earlier in the session to $4,422.89. U.S. gold futures for February delivery settled 0.7% lower at $4,462.50, keeping prices elevated despite the pullback.
Traders described the move as a pause rather than a reversal, following a sharp upswing that had pushed bullion close to recent highs.
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“We’re viewing today’s pullback as general profit taking after that recent surge,” said David Meger, director of metals trading at High Ridge Futures.
He added that softer U.S. employment data continues to underpin the broader bullish case for gold by strengthening expectations of monetary easing.
Those expectations were reinforced on Wednesday by fresh labor market figures. U.S. job openings fell more than anticipated in November after a modest rise in October, while a separate report from ADP showed private payroll growth in December came in below forecasts. Together, the data added to evidence of cooling momentum in the labor market, a key variable for Federal Reserve policy decisions.
Markets are now pricing in about 61 basis points of interest-rate cuts over the course of the year, according to LSEG data, with attention turning to Friday’s closely watched U.S. nonfarm payrolls report for further confirmation. Lower interest rates tend to support gold because the metal offers no yield and becomes more attractive when borrowing costs fall, and real yields ease.
Beyond monetary policy, geopolitical uncertainty remains an important pillar of support for bullion, even as prices fluctuate day to day. Tensions have persisted following the reported capture of Venezuelan President Nicolas Maduro over the weekend. U.S. President Donald Trump said on Tuesday that Washington plans to refine and sell Venezuelan crude, while the White House separately confirmed discussions around acquiring Greenland, including the possibility of military involvement. The combination of political shock, energy market implications, and broader strategic uncertainty has kept safe-haven assets firmly on investors’ radar.
Structural demand from central banks also continues to lend support. China’s central bank extended its gold-buying streak to a 14th consecutive month in December, according to official data, underscoring persistent demand from Asia.
“The data from China continues to show strong demand that we’re seeing from Asia … and again, one more reason why we’ve seen this recent push to the upside,” Meger said.
Despite Wednesday’s decline, gold remains underpinned by a confluence of factors: expectations of looser U.S. monetary policy, ongoing geopolitical risk, and steady central bank accumulation. Analysts note that these forces have helped keep prices elevated even when short-term profit-taking sets in.
Other precious metals saw sharper moves lower. Spot silver slid 4.1% to $77.93 per ounce, reflecting its greater volatility and sensitivity to shifts in investor sentiment. HSBC raised its 2026 silver price forecast to $68.25, but warned that easing supply could trigger bouts of volatility. Goldman Sachs has also cautioned that thin inventories in London could drive sharp swings and squeeze-led rallies that may later unwind.
Meanwhile, platinum dropped 6.5% to $2,285.75 per ounce, while palladium fell 5.2% to $1,727.40, as investors reassessed positions across the broader metals complex.
Taken together, the day’s moves highlight a market balancing near-term profit-taking against a still-supportive macro backdrop. While gold has retreated from recent highs, expectations of Fed easing, persistent geopolitical uncertainty, and continued central bank buying suggest that the underlying narrative supporting bullion remains intact, even as prices adjust in the short term.