Gold and silver prices dipped slightly on Thursday after strong US economic data strengthened the dollar.
A stronger dollar makes commodities priced in the greenback more expensive for overseas buyers, thereby weakening demand.
The dollar index experienced a rise after a surprisingly robust employment report, which indicated underlying strength in the US economy.
According to Imaru Casanova, Portfolio Manager of Gold and Precious Metals at Van Eck, the fluctuations in the gold price during January indicated volatility, not an underlying weakness.
A sustainable, long-term bull market for gold is still supported in 2026 and beyond by robust investment demand, ongoing central bank purchases, and improving fundamentals among miners, Casanova added.
Gold’s volatile January
“Rising geopolitical tensions around the world, in particular, developments involving Venezuela, Iran and Greenland, combined with persistent US tariff and sanctions threats, pushed gold above $5,000 per ounce on January 26,” she noted.
Breaking through that psychological level appeared to unleash a wave of speculative buying. By January 29, gold was trading at an intraday high of $5,595 per ounce, nearly $1,300 higher than at the end of 2025.
A nearly inevitable pullback in price action, according to Casanova, found its catalyst in the nomination of Kevin Warsh as the next Fed Chair on January 30. This event caused gold prices to collapse by 9% on that single day.
Warsh’s candidacy was initially viewed as a hawkish signal, suggesting a potentially less accommodative monetary policy that would strengthen the US dollar and negatively impact gold.
However, following the initial market reaction, the implied probability of a Fed rate cut slightly increased. This shift likely reflects Warsh’s remarks suggesting a favorable stance toward US President Donald Trump’s preference for lower interest rates.
Gold closed on January 30 at $4,894.23 per ounce, achieving a monthly gain of $574.86, or 13.31%.
Long-term bull market
Despite the dramatic selloff, Casanova maintains that the key price drivers for gold are still intact.
“January’s price action is a reminder of both gold’s uncontested role as a safe haven and US dollar alternative, and the increased volatility that comes with trading at record levels,” she said.
In our view, these sharp swings should not distract or deter gold investors. Gold’s longer-term outlook remains supported by the same forces that drove it in 2025: central banks and investors seeking protection, diversification and de-dollarization in their reserves and portfolios.
Gold is expected to continue benefiting in 2026 from factors such as rising geopolitical risks, trade tensions, inflation concerns, the possibility of a weaker dollar, and the risk of a significant correction in currently overextended equity markets.
Although new peaks will likely be followed by retreats and periods of stable, range-bound trading, this gold bull market is anticipated to persist for several more years, Casanova added.
Strong US data and Fed rate cut outlook
Despite a surprise acceleration in US job growth in January and a drop in the unemployment rate to 4.3%, the labour market’s health may be overstated by the largest monthly increase in payrolls in 13 months.
This is due to significant downward revisions, which revealed the economy added only 181,000 jobs in 2025, a substantial decrease from the previously estimated 584,000.
The Congressional Budget Office (CBO) predicted on Wednesday that the US budget deficit is projected to increase slightly in fiscal year 2026, reaching $1.853 trillion.
This forecast indicated that, overall, Trump’s economic policies are exacerbating the nation’s financial problems amid a context of slow economic growth.
A recent Reuters poll indicated that the Federal Reserve is expected to maintain its current interest rates until May, coinciding with the end of Chair Jerome Powell’s term.
However, the poll suggested an immediate rate cut will occur in June.
Economists expressed concern that the monetary policy under Powell’s likely successor, Kevin Warsh, could lead to an overly loose stance.
The price of gold on COMEX last traded at $5,095.49 per ounce, down just 0.1%, while silver was 0.2% lower at $83.760 an ounce.