Gold prices retreated on Thursday as investors engaged in profit-taking activities following three consecutive sessions that delivered record highs. The pullback came amid a softer geopolitical tone from Trump regarding the Federal Reserve chair and Iran, which dampened the traditional safe-haven appeal of precious metals.

Gold Performance and Market Dynamics

Spot gold declined 0.6% to $4,594.66 per ounce as of 0137 GMT, retreating from the previous session's record high of $4,642.72. U.S. gold futures for February delivery showed a steeper decline, slipping 0.8% to $4,599.50.

Political Developments Impact Safe-Haven Demand

Trump's comments on Wednesday regarding Federal Reserve chair Jerome Powell contributed to the decline in gold prices. He stated that he has no plans to fire Powell despite a Justice Department criminal investigation into the Federal Reserve chair, though he noted it was "too early" to say what he would ultimately do. Analysts have noted that concerns about Fed independence and trust in U.S. assets have been supporting safe-haven demand for bullion.

Regarding Iran, Trump indicated that the country's crackdown on nationwide protests appeared to be easing, while Tehran warned it would strike U.S. military bases in the region if Washington launched an attack. This softer tone on geopolitical tensions reduced the immediate safe-haven appeal of gold.

Economic Data and Monetary Policy Outlook

U.S. retail sales exceeded expectations in November, while the Producer Price Index (PPI) met monthly forecasts but surpassed annual estimates. These figures followed weaker-than-expected December core Consumer Price Index data released on Tuesday. Despite the mixed economic signals, traders continue to anticipate two interest rate cuts this year.

Investor focus will shift to U.S. weekly jobless claims for the first week of January, which will provide additional insights into labor market conditions and potential monetary policy direction. A low-interest-rate environment, combined with geopolitical and economic uncertainty, traditionally favors non-yielding assets such as gold.

Broader Precious Metals Decline

Other precious metals experienced more pronounced declines than gold. Silver showed the steepest fall, dropping 5.3% to $87.88 per ounce after hitting an all-time high of $93.57 earlier in the session. Platinum receded 4% to $2,288.05 per ounce from its record peak of $2,478.50 reached on December 29. Palladium lost 2.5% to $1,753.53 per ounce, hovering near a one-week low.

Silver and gold prices retreated on Thursday after US President Donald Trump temporarily held off on imposing fresh tariffs on critical mineral imports, providing some relief to precious metals markets that had surged to new peaks earlier in the week.

Precious Metals Performance

Silver traded close to $92.00 per ounce, pulling back from its Wednesday peak, while gold declined across major markets. The retreat came after concerns regarding potential US tariffs on silver, platinum, and palladium were temporarily eased.

Trump's Tariff Strategy Shift

Trump announced he would negotiate bilateral agreements to ensure adequate suppliers of critical minerals rather than immediately imposing tariffs. According to a statement released late Wednesday, the President floated the concept of price floors on imports instead of traditional percentage-based tariffs to develop domestic supply chains.

This approach represents a shift from earlier concerns about immediate tariff implementation on critical minerals including silver, platinum, and palladium. The announcement provided temporary relief to markets that had been pricing in potential supply disruptions.

Recent Market Rally Context

A broad metals rally had sent silver and gold to new peaks on Wednesday, alongside copper and tin, as investors rotated into hard assets amid multiple uncertainties:

• Geopolitical tensions
• Supply chain concerns
• Tariff uncertainty
• Frenzied buying activity in China and the US
• Broader rotation into commodities

The precious metals sector's strong performance at the start of the year has been supported by Trump's renewed threats against the Federal Reserve, which sparked a "sell America" trade and boosted alternative stores of value.

Federal Reserve Policy Implications

Federal Reserve officials emphasized central bank independence on Wednesday, with several officials signaling they are unlikely to support another rate cut when they meet later this month. The officials cited a resilient economy and concerns over still-elevated inflation as reasons for maintaining current rates.

Most Fed officials, except Stephen Miran, indicated resistance to further rate reductions in the near term. A pause in rate cuts may temporarily weigh on precious metals, which do not yield interest. However, traders continue pricing in one rate cut by July and two cuts by year-end, suggesting longer-term support for the sector.

Market Outlook

The precious metals market faces mixed signals as tariff concerns ease temporarily while monetary policy uncertainty persists. The combination of geopolitical factors, supply chain considerations, and Federal Reserve policy decisions continues to drive investor interest in hard assets as alternative stores of value.