Gold pulled back from a record high on Thursday as traders evaluated the outlook for US interest rates. The move followed a weaker-than-anticipated inflation reading and renewed criticism of the Federal Reserve by the Trump administration. Silver briefly surpassed $89 per ounce before retreating slightly.
Bullion traded just above $4,600 an ounce after earlier reaching a new peak of $4,634.55. The US dollar strengthened further after core inflation figures for December came in below fears, bolstering arguments for potential Fed rate cuts later in the year. Swap markets continued to nearly fully price in a rate reduction by the June policy meeting, with some possibility of an earlier move but very low expectations for action at the January 28 meeting.
While anticipated interest rate easing later in 2026 could benefit non-yielding gold, a stronger US currency exerted pressure on the metal, which is priced in dollars. However, haven demand provided support following escalated White House attacks on the Fed. The administration has initiated a probe into the central bank's headquarters renovation. President Donald Trump has repeatedly stated his desire to dismiss Fed Chair Jerome Powell before Powell's term concludes in May.
"With just one day remaining in the annual commodity index rebalancing, the market's strength during what should have been a period of mechanical selling is striking," said Ole Hansen, a strategist at Saxo Bank A/S. "Gold and silver absorbing that supply without flinching is sending a powerful signal to investors and reinforcing the sense that, for now, the bull train still has further to run."
The Bloomberg Commodity Index, a widely followed benchmark for a basket of commodities, resets its weights once annually. The five-day roll period began on Thursday.
Silver climbed to an all-time high of $89.119 before paring gains to trade just above $87. The white metal's strength builds on a 148% rally from 2025, driven by a historic short squeeze and speculative frenzy. "A large share of the activity is being driven by speculative flows, particularly momentum-oriented traders who chase strength on the way up but are equally quick to cut exposure when prices turn," according to Hansen.
Citigroup Inc. forecasts gold will reach $5,000 an ounce and silver will hit $100 an ounce within the next three months. "We expect the bull market to stay intact in the near term," Citi analysts stated in a note. "Our base case is for eventually moderating geopolitical risks to weigh on hedging demand for precious metals later in the year, particularly on gold."
Meanwhile, CME Group will alter its method for setting margins on gold, silver, platinum, and palladium futures following recent price surges and volatile trading. The new approach will be based on a percentage of so-called notional value, rather than a previous dollar amount basis, and will take effect from Tuesday's close. The US exchange also announced on Tuesday the upcoming launch of a 100-ounce silver contract designed to facilitate greater retail investor participation.
As of 3:11 p.m. in New York, spot gold slipped 0.1% to $4,592.93 an ounce. The Bloomberg Dollar Spot Index rose 0.1%. Silver climbed 2.4%. Platinum edged higher while palladium declined.