Gold prices retreated on Tuesday after a five-day winning streak as investors locked in profits amid anticipation of key U.S. economic data this week, which may provide indications regarding the Federal Reserve’s stance on future interest-rate path.
The precious metal traded near $4,280 an ounce, declining by as much as 0.6% and remaining within $100 of the record high achieved in October following the Fed’s third rate cut last week. However, Federal Reserve officials have since expressed mixed opinions about the necessity for additional policy easing in 2026.
According to Hebe Chen, senior market analyst at Vantage Markets in Melbourne, consecutive bouts of profit-taking near October’s peaks have resulted in volatility, though the quick return of buyers on declines suggests these moves indicate consolidation rather than a loss of conviction among investors.
The forthcoming U.S. economic reports are expected to offer further clarity following a six-week government shutdown that delayed data releases. Economists expect payrolls to rise by 50,000 and the unemployment rate to be at 4.5%, levels that point to a sluggish but not sharply weakening labor market.
Meanwhile, Michael Wilson, strategist at Morgan Stanley & Co., noted that even slightly disappointing employment data could support the case for further monetary easing, typically a positive factor for gold, which offers no interest.
Gold has posted gains of over 60% this year, hitting an all-time high of $4,381.52 in October, while silver has more than doubled, putting both on pace for their strongest annual performance since 1979.
The rallies have been driven by strong purchases from central banks and a shift by investors away from sovereign bonds and currencies. Data from the World Gold Council show that holdings in gold-backed exchange-traded funds have increased each month this year except May.
