Gold and Silver Pull Back After Record Performance

 

Gold and Silver Pull Back After Record Performance

(Bullion News Network) – The spot price of gold pulled back marginally on Friday to end the week, shedding around $22.70 per troy ounce as a favorable inflation report earlier this week drove the United States dollar higher. The precious metal ended the trading day slightly below $4,600 per troy ounce, its second consecutive daily loss after setting a fresh high of more than $4,625/ozt on Wednesday. Silver followed suit, shedding over $2 per troy ounce and testing the $90/ozt level. On Wednesday, silver closed at a record $93.22 per troy ounce. The price action favored gold, driving the gold-silver ratio more than a point higher to cross 50:1. On Wednesday, silver’s historic performance drove the GSR to below 50:1, its lowest rate since September of 2011. On the retail side of the precious metals market, soaring silver prices have caused shipping delays at many popular retailers, posing an acute threat to the supply chain from refiners to retail investors.

Platinum-group metal prices also retreated on Friday. The spot price of platinum pulled back by more than $70 per troy ounce, while palladium limited its losses to just over $17/ozt. The price action favored palladium, pulling the platinum-palladium gap lower to around $519 per troy ounce.

The Federal Reserve continued to dominate U.S. economic headlines throughout the week. Last weekend, the Federal Reserve revealed that it was served a subpoena by the Department of Justice as part of a Trump administration investigation into the Fed’s multi-billion dollar HQ renovation. Federal Reserve Chair Jerome Powell said in a response that he believes the investigation is part of an effort to influence Powell and the FOMC into cutting interest rates, a longstanding demand of U.S. President Donald Trump.

This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role […] This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.

Adding to the uncertainty is the ongoing search for Chair Powell’s replacement. Powell will leave office in May, allowing Trump to nominate his own pick for the Chair of the Federal Reserve. On Friday, prediction markets saw odds surge for Kevin Warsh, a Wall Street loyalist who served as a governor of the Federal Reserve during the 2008 financial crisis. Market expectations that Warsh will receive the nomination jumped after Trump suggested that he may prefer to retain Kevin Hassett, the former odds-on favorite, at his position as the White House Economic Council director. 10-year Treasury yields jumped to a recent high on the news, while gold and silver prices retreated.

Warsh is a strong opponent of large asset acquisitions by the Federal Reserve, and many traders seem to believe that a Warsh chairmanship would slow the creation of U.S. government debt. Gold futures slipped on the news; precious metal prices were buoyed in 2026 partially on bets that U.S. debt acquisition would continue to accelerate. Trump’s hint at a potential Fed Chair candidate could also take a bite out of uncertainty, which helped drive both gold and silver to all-time highs following news of the Department of Justice’s investigation into Powell and the rest of the Federal Reserve.

Relatively tame inflation numbers could also be anchoring gold and silver prices to end the week. On Wednesday, the December Consumer Price Index was published, showing inflation numbers did not change from November to December. The core CPI was also unchanged from November, coming in 0.1% lower than the median forecast. Year over year, CPI numbers came in at 2.6%, 0.2% lower than the median projection. These numbers could complicate the Federal Reserve’s read heading into its Jan. 28 meeting, but the market still largely expects no change in the federal interest rate to end the month. CME FedWatch projects that the probability of a rate cut at the Fed’s January meeting is 5%, marginally up from 4.4% yesterday and 4.4% one week ago.

Uncertainty surrounding the Fed remains. On Thursday, Chicago Federal Reserve President Austan Goolsbee warned that threats to the central bank’s independence could cause inflation to rise. Goolsbee, a longtime ally and supporter of Chair Jerome Powell, told an interviewer on CNBC that the loss of Federal Reserve independence could chart a rocky road for a recovering U.S. economy.

Anything that’s infringing or attacking the independence of the central bank is a mess […] You’re going to get inflation come roaring back if you try to take away the independence of the central bank.

Next week, traders will have access to a fresh inflation reading with the (delayed) November Personal Consumption Expenditures (PCE). This report will give markets – and the Federal Reserve – more insight into whether consumer prices are continuing to climb in the United States. The FOMC will make its first interest rate decision of the year the following Wednesday, Jan. 28. Interest rate speculation is expected to play an outsized role in safe haven asset demand throughout 2026, as was the case for much of 2025.