Bullion fell by as much as 0.8% on Thursday, following a 1.2% gain in the previous session, News.Az reports, citing Bloomberg.
US payrolls increased by the largest amount in over a year, while the unemployment rate unexpectedly declined in January, signaling that the labor market remained resilient at the start of 2026.
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The data is likely to reinforce the Federal Reserve’s preference to keep rates unchanged for now. Many traders have shifted their expectations for the next rate cut to July, rather than June. Lower interest rates typically support gold prices, as the metal does not generate interest income.
Despite the pullback, gold remained above $5,000 an ounce and has recovered roughly half of the steep losses recorded during a sharp selloff earlier in the month. The precious metal had surged to a record high above $5,595 in late January before speculative buying overheated the rally. Prices then tumbled approximately 13% over two sessions.
Several major banks maintain that gold’s broader upward trajectory remains intact. Analysts point to ongoing geopolitical tensions, concerns over the Federal Reserve’s independence, and a broader shift away from traditional assets such as currencies and sovereign bonds as key drivers. BNP Paribas forecasts gold reaching $6,000 per ounce by year-end, while Deutsche Bank and Goldman Sachs also project further gains.
Silver also retreated, dropping as much as 3.2% on Thursday. The metal has historically exhibited sharper price swings than gold due to its smaller market size and lower liquidity, but recent volatility—described as the most intense since 1980—has been particularly pronounced. Silver has fallen roughly one-third from its all-time high reached on January 29.
Thursday’s decline followed a 4.3% surge in the previous session after the Silver Institute reported that the market is expected to post a deficit for a sixth consecutive year. The report cited strong investment demand offsetting weaker jewelry demand and efforts to reduce silver usage in the solar sector.
In China, supply constraints persist as both investment and industrial demand continue to draw down inventories. In response, the Shanghai Futures Exchange announced it will prevent certain businesses holding silver futures for hedging purposes from carrying their contracts through to delivery, a measure aimed at limiting warehouse outflows.
As of 1:04 p.m. in Singapore, spot gold was down 0.3% at $5,069.65 an ounce. Silver slipped 0.6% to $83.78 an ounce. Platinum declined 0.3%, while palladium edged up 0.3%. The Bloomberg Dollar Spot Index was little changed.
