Gold plunges as bets of a more hawkish Fed chair rise; set for best month since 1980

Jan 30 (Reuters) – Gold slid more than 4% on Friday on rumours the Federal Reserve could get a more hawkish chair, but was still on track for its strongest monthly gain since 1980 as investors flocked to the safe haven amid lingering geopolitical and economic strains.

Spot gold lost 3.9% to $5,183.21 per ounce, as of 0323 GMT, after falling as much as 5% earlier. It scaled a record high of $5,594.82 on Thursday.

Prices have risen more than 20% so far in January, heading for a sixth straight monthly gain and the largest monthly advance since January 1980.

U.S. gold futures for February delivery fell 2.7% to $5,176.40 per ounce on Friday.

“So, a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal,” KCM Chief Trade Analyst Tim Waterer said.

U.S. President Donald Trump said on Thursday he intends to announce his pick to replace Fed Chair Jerome Powell on Friday, as speculation intensifies over who will lead the U.S. central bank after Powell steps aside from the job in May.

“Rumours that Kevin Warsh will replace Jerome Powell as Fed Chair has weighed on gold during Asian trade,” said Matt Simpson, a senior analyst at StoneX.

The dollar recovered from multi-year lows, supported in part by the Fed’s decision on Wednesday to leave interest rates unchanged, but was poised for a second straight weekly decline.

A stronger dollar make greenback-priced gold more expensive for overseas buyers. Markets still expect two interest rate cuts in 2026. [USD/][FEDWATCH]

Gold exports from Switzerland to the UK, home to the world’s largest over-the-counter gold trading hub, jumped to their highest since August 2019, customs data showed on Thursday.

The Hang Seng Gold ETF surged more than 9% on its trading debut in Hong Kong in the previous session.

Spot silver slipped 5.7% to $109.55 an ounce, after hitting a record high of $121.64 on Thursday. The metal has surged 56% so far this month, on track for its best-ever monthly performance.

Spot platinum lost 5.3% to $2,489.31 per ounce after hitting an all-time high of $2,918.80 on Monday, while palladium rose 5.8% to $1,890.25.