Gold prices exhibited significant volatility in early February 2026, dropping more than 2% to around $4,840 per ounce before rebounding to approximately $4,970 in subsequent trading sessions. This fluctuation was largely influenced by renewed selling pressure following cautious statements from the Federal Reserve regarding interest rate cuts, coupled with ongoing economic data releases from the United States.
The precious metal had initially climbed above the $5,000 mark earlier in the week, driven by safe-haven demand amid persistent geopolitical uncertainties, including developments in the Middle East and U.S.-Iran relations. However, the release of the ISM Services PMI holding steady at 53.8 in January, alongside ADP reports indicating a cooling U.S. labor market, prompted investors to reassess the likelihood of aggressive rate reductions, leading to a temporary pullback in gold's value.
Analysts from institutions such as JP Morgan and Wells Fargo have revised their forecasts upward, projecting gold to reach between $6,100 and $6,300 per ounce by the end of 2026. These optimistic outlooks are based on expectations of sustained central bank purchases, lower short-term interest rates, and robust investor demand. Despite recent corrections, gold has surged over 70% year-over-year, underscoring its role as a hedge against inflation and economic instability.
In parallel, silver prices faced even sharper declines, tumbling up to 16.6% before partial recovery, reflecting broader market dynamics in precious metals. The volatility in China, the world's largest gold consumer, saw significant outflows from gold ETFs, though Shanghai premiums indicated a rebound in physical demand. Market watchers suggest that while short-term oscillations may continue, the long-term trajectory for gold remains bullish, supported by global economic factors and policy shifts under the current U.S. administration.
Traders are now focusing on upcoming U.S. JOLTS Job Openings data and further geopolitical developments for directional cues. The interplay between a softening dollar and Treasury yields will also be critical in determining gold's near-term path, as investors navigate the balance between opportunity costs and safe-haven appeal.
