Gold slid more than 4 percent on Friday on rumours the Federal Reserve could get a more hawkish chair, but was still on track for its strongest monthly gain since 1980 as investors flocked to the safe haven amid lingering geopolitical and economic strains.
Spot gold lost 3 percent to $5,232.57 per ounce, as of 0520 GMT, after falling more than 5 percent earlier. It scaled a record high of $5,594.82 on Thursday.
Prices have risen more than 20 percent so far in January, heading for a sixth straight monthly gain and the largest monthly advance since 1980.
US gold futures for February delivery fell 1.8 percent to $5,225.0 per ounce on Friday.
"So, a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal," KCM Chief Trade Analyst Tim Waterer said.
US President Donald Trump said on Thursday he intends to announce his pick to replace Fed Chair Jerome Powell on Friday, with speculation intensifying that the nod will go to former Fed Governor Kevin Warsh.
"Rumours that Kevin Warsh will replace Jerome Powell as Fed Chair have weighed on gold during Asian trade," said Matt Simpson, a senior analyst at StoneX.
Silver follows gold
The dollar recovered from multi-year lows, supported in part by the Fed's decision on Wednesday to leave interest rates unchanged, but was poised for a second straight weekly decline.
A stronger dollar makes greenback-priced gold more expensive for overseas buyers. Markets still expect two interest rate cuts in 2026.
Gold exports from Switzerland to the UK, home to the world's largest over-the-counter gold trading hub, jumped to their highest since August 2019, customs data showed on Thursday.
The Hang Seng Gold ETF surged more than 9 percent on its trading debut in Hong Kong in the previous session.
Spot silver slipped 3.6 percent to $111.99 an ounce, after hitting a record high of $121.64 on Thursday. The metal has surged 56 percent so far this month, on track for its best-ever monthly performance.
Spot platinum lost 3.7 percent to $2,531.84 per ounce after hitting an all-time high of $2,918.80 on Monday, while palladium eased 4 percent to $1,925.50.
