Emre Yumlu 
Gold and silver have entered a period of heightened volatility as shifting expectations around U.S. monetary policy weigh on prices. While short-term pressure has pushed gold and silver lower, the broader monthly trend for both metals remains firmly positive.
Hawkish Fed Expectations Pressure Prices
The recent decline in gold prices has been largely driven by speculation surrounding the future leadership of the U.S. Federal Reserve. Markets have grown increasingly cautious following signals that a more hawkish figure could be appointed to replace current Fed Chair Jerome Powell.
Reports suggesting that former Fed official Kevin Warsh may be considered for the role have reignited expectations of tighter monetary policy. This scenario has strengthened the U.S. dollar in the short term, creating headwinds for gold, which typically struggles when yields and the dollar move higher.
Gold: Record Highs Followed by a Rapid Correction
Spot gold experienced a sharp intraday sell-off, falling more than 5% at its worst before stabilizing around $5,177 per ounce, marking a decline of roughly 3.5%. The move came just one day after gold reached an all-time high near $5,594, underscoring the speed at which sentiment shifted.
Futures markets reflected a similar trend. February gold contracts in the U.S. slipped by approximately 1.8%, trading near $5,225 per ounce as traders adjusted positions amid the changing policy outlook.
Domestic Gold Prices React to Global Moves
The turbulence in global markets was also felt domestically. In Turkey’s Grand Bazaar, gram gold prices hovered around 7,691 Turkish lira, while quarter gold was trading near 12,548 lira. These levels reflect the combined impact of global price movements and currency dynamics.
Strong Monthly Performance Remains Intact
Despite the recent pullback, gold’s broader performance remains notable. The metal has gained more than 20% over the course of January and is on track for its sixth consecutive monthly advance. This rally represents one of the strongest monthly performances seen since 1980, highlighting the resilience of safe-haven demand.
Other Precious Metals Also Retreat
Gold’s decline spilled over into the wider precious metals complex. Silver retreated nearly 4% to around $109 per ounce after recently posting record highs. Platinum fell roughly 3.7%, while palladium dropped about 4%.
Even so, silver continues to stand out on a monthly basis, maintaining an exceptional rally despite the short-term correction.
Outlook
Analysts note that uncertainty surrounding Federal Reserve policy is likely to keep volatility elevated in the near term. However, as long as global economic and geopolitical risks persist, demand for safe-haven assets such as gold and silver is expected to remain structurally strong.
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