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Gold prices held steady during early Asian trading on Monday, following one of the most dramatic weekly declines seen in the precious metals market in decades. Despite the sharp correction, gold continues to attract investor attention as a safe-haven asset, a trend closely monitored by Point Trader Group across its ongoing market analysis.

Spot gold inched higher by 0.2% to trade near $4,870.68 per ounce, while April gold futures climbed roughly 3% to $4,886.31 per ounce. This modest recovery comes after spot gold plunged nearly 10% on Friday, retreating sharply from last week’s historic peak of $5,600 per ounce.

Precious Metals Rebound, but Momentum Remains Fragile

The sell-off extended across other precious metals before signs of relief appeared. Spot silver advanced by nearly 4% to $87.70 per ounce, while platinum stabilized around $2,159.79 per ounce.
According to insights from Point Trader Group, this rebound reflects temporary bargain hunting rather than a full restoration of market confidence, highlighting the fragile sentiment surrounding commodities at the moment.

Why Did the Gold Market Collapse? Policy Shifts Shake Investor Confidence

One of the key drivers behind last week’s historic gold sell-off was the political shift surrounding U.S. monetary leadership. The nomination of Kevin Warsh by President Donald Trump as the next Federal Reserve Chair—set to take over after Jerome Powell’s term expires in May—removed a major source of uncertainty for markets.

This clarity reduced demand for gold as a safe-haven asset, encouraging traders to lock in profits near record price levels.
However, the nomination also introduced fresh concerns. Warsh is widely regarded as one of the more hawkish voices on long-term inflation risks. While he supports aggressive interest rate cuts under certain economic conditions, he has been strongly critical of the Federal Reserve’s large-scale asset purchases.

Analysts noted that these hawkish leanings raised fears that future monetary easing could be far more limited than markets previously assumed. Point Trader Group highlights that this shift in expectations triggered a wave of panic selling, contributing to the largest single-day gold drop in nearly forty years.

Furthermore, a buildup of extreme positions in the options market during gold’s steep rally in late 2025 and early 2026 helped amplify the crash, as leveraged positions unwound aggressively.

Stronger Dollar Adds Pressure to Precious Metals

The U.S. dollar continued its rebound from a four-year low following Warsh’s nomination. Since gold typically moves inversely to the dollar, the currency’s strength added additional downward pressure.
Market updates from Point Trader Group emphasize that as long as the dollar maintains its upward momentum, gold may struggle to quickly regain its record highs.

Despite the Turmoil, Gold Ends January With Strong Gains

Even after last week’s meltdown, gold finished January with an impressive 15% monthly gain. Rising geopolitical risks, economic uncertainty, and increasing market volatility all boosted safe-haven demand.
According to Point Trader Group, these ongoing global tensions remain a key factor supporting gold’s medium-term outlook.

Market Outlook: What Point Trader Group Expects Next

Looking ahead, gold is expected to remain highly sensitive to signals from the Federal Reserve—particularly regarding inflation, interest rate cuts, and the future of asset purchases. Point Trader Group continues to track these developments in real time to provide traders with clear, data-driven insights.

With uncertainty still dominating global markets, gold’s long-term trajectory will depend on the balance between monetary policy expectations and investor appetite for safe-haven assets.