Gold prices extended their retreat from recent record highs during Monday’s Asian session, as investors reacted to upcoming changes in margin requirements and reassessed the outlook for United States monetary policy and geopolitical risks.
Pressure on bullion was partly linked to CME precious metals margin requirements set to take effect at the session close, a factor that contributed to selling as market participants adjusted positions.
At the same time, attention remained fixed on U.S. President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair and what his approach could mean for the path of interest rates.
By 3:30 pm AEDT (4:30 am GMT), spot gold was trading 4.4% lower at $4,679.41 per ounce. Silver prices also dipped 6% to $79.40 per ounce, after plummeting nearly 33% during Friday's session.
A resilient dollar continued to cap upside in the non-yielding metal. As long as the greenback finds support, gold faces difficulty regaining strong upward momentum, particularly after an extended rally that had driven prices to historic peaks.
Safe-haven demand for gold also softened amid signs of easing tensions between the United States and Iran.
Over the weekend, Trump said the U.S. would “hopefully” reach a deal with Iran, after Supreme Leader Ayatollah Ali Khamenei warned of a regional conflict if Washington launched an attack.
The more conciliatory tone reduced immediate fears of a sharp escalation, trimming part of the geopolitical risk premium that had previously supported gold.
Investors are now turning their focus to upcoming U.S. economic releases, beginning with the ISM Manufacturing PMI. Employment figures due later in the week are also expected to play a central role in shaping expectations for the Federal Reserve’s next policy moves.
