Gold prices opened lower on Friday, January 16, continuing their decline from earlier in the week as stronger-than-anticipated U.S. economic data bolstered the dollar, alleviating geopolitical tensions between the U.S. and Iran, and reducing expectations for imminent interest rate cuts by the Federal Reserve. MCX Gold futures due February 5, 2026, declined by Rs 546 or 0.38%, settling at Rs 1,42,575 per 10 grams. Meanwhile, silver futures for March 5, 2026 delivery decreased by Rs 4,699 or 1.61% to Rs 2,86,878 per kg, pulling back from their record high of Rs 2,92,960.
Gold and silver prices experienced a decline on Friday, influenced by robust economic data from the U.S. that bolstered the dollar and reduced expectations for immediate interest rate reductions by the Federal Reserve. Spot gold experienced a decline of 0.3%, settling at $4,601.53 per ounce by 0217, following a retreat from Wednesday’s peak of $4,642.72. Notwithstanding the recent pullback, the yellow metal is poised to achieve a weekly gain of nearly 2%. U.S. gold futures for February delivery experienced a decline of 0.4%, currently trading at $4,605.20. Silver experienced a notable decrease, dropping 1.6% to $90.80 per ounce. Nonetheless, the metal is poised to record a robust weekly increase of approximately 13%, having reached an unprecedented peak of $93.57 in the prior session.
The allure of gold as a safe haven was notably diminished by the reduction in geopolitical tensions. U.S. President Donald Trump suggested that the number of fatalities associated with Iran’s crackdown on protests seemed to be declining, and he expressed that he did not anticipate a surge in executions. The U.S. dollar strengthened, poised for a third consecutive weekly gain. The Labour Department’s report indicated a decline in weekly jobless claims to 198,000, significantly under the consensus estimate of 215,000, reflecting persistent robustness in the labour market. A robust dollar generally exerts downward pressure on commodities priced in dollars, rendering them less appealing to international purchasers.
Gold, which does not generate interest, typically gains when interest rates are low. However, with rate cuts now perceived as less probable in the immediate future, the opportunity cost of holding gold increases, exerting downward pressure on prices. As of today, the U.S. Dollar Index is hovering around 99.31, marginally down by 0.01 points or 0.01%. In a separate development, China’s central bank declared specific rate reductions on Thursday, intended to bolster economic activity. In Europe, Poland’s central bank announced intentions to increase its gold reserves to 700 tonnes, as stated by its governor.