Gold prices rose by more than 6% in European trading on Tuesday, beginning a rebound from a four-week low, after a sharp three-day selloff driven by a historic wave of liquidation across precious metals. The recovery is also supported by a pause in the US dollar’s advance in the foreign exchange market.

Starting today, traders are closely watching the release of several very important US labor market reports, which are expected to provide strong clues about the Federal Reserve’s interest rate path over the course of this year.

Price Overview

• Gold prices today: Gold rose by 6.2% to $4,949.81, up from the session opening level at $4,660.63, and recorded a session low at $4,660.63.

• At Monday’s settlement, the precious metal gold fell by 4.75%, marking its third consecutive daily loss, and hit a four-week low at $4,402.83 per ounce.

• In addition to accelerated profit-taking from the all-time high at $5,598.13 per ounce, the gold market entered a historic selloff after concerns about Federal Reserve independence eased, and after CME Group raised margin requirements on gold and silver futures.

The US Dollar

The US Dollar Index fell by 0.2% on Tuesday, pulling back from a two-week high at 97.73 points, reflecting a halt in the dollar’s gains against a basket of major and minor currencies.

Beyond profit-taking, the dollar is edging lower as investors refrain from building new long positions while waiting for clearer signals on the future path of US interest rates.

US Interest Rates

• According to the CME FedWatch tool, pricing for keeping US interest rates unchanged at the March meeting stands at 85%, while the probability of a 25-basis-point rate cut is priced at 15%.

• To reprice those expectations, traders are closely monitoring a series of very important US labor market data releases.

• Later today, US job openings data for the end of last November will be released, followed on Wednesday by private-sector payrolls data for January, and on Thursday by weekly jobless claims.

Gold Outlook

Deutsche Bank analysts said that history suggests short-term drivers are usually behind moves of this kind, even if the scale of the recent selloff has raised fresh questions about market positioning.

The bank’s analysts explained that although speculative activity indicators have been elevated for months, they are not sufficient on their own to explain the magnitude of last week’s move.

They added that the correction in precious metals prices exceeded the apparent catalysts, and that it is unlikely investor intentions toward precious metals — whether official, institutional, or retail — have fundamentally turned more negative.

Deutsche Bank noted that the selloff resulted from a mix of factors, including a rebound in the US dollar, shifting expectations about Federal Reserve leadership after President Donald Trump nominated Kevin Warsh to head the Fed, and position trimming ahead of the weekend.

Xavier Wong, market analyst at eToro, said speculative positioning clearly played a short-term role. He added that silver attracted greater retail participation than gold, making it more sensitive to fast shifts in sentiment and short-term trading flows.

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, were unchanged on Monday, keeping the total at 1,087.10 metric tons.

The euro rose in European trading on Tuesday against a basket of global currencies, posting its first gain in three days versus the US dollar, as part of a rebound attempt from a two-week low, supported by a pause in the dollar’s advance in the foreign exchange market ahead of key US labor market data.

Investors are awaiting the release on Wednesday of headline inflation data for the euro area for January, which is expected to provide strong signals about the European Central Bank’s interest rate path this year.

Price Overview

The euro rose 0.2% against the US dollar to $1.1816, from the day’s opening level at $1.1791, and recorded a session low at $1.1785.

The euro closed Monday down 0.5% against the dollar, marking a second straight daily loss, and hit a two-week low at $1.1776 after the release of strong US economic data.

US Dollar

The dollar index fell 0.2% on Tuesday, pulling back from a two-week high at 97.73 points, reflecting a pause in the US currency’s gains against a basket of major and minor currencies.

Beyond profit-taking sales, the dollar weakened as investors refrained from building new long positions ahead of important US labor market data, which will offer clearer guidance on the Federal Reserve’s interest rate path this year.

Later today, US job openings data for the end of November will be released, followed on Wednesday by US private payrolls data, Thursday’s weekly jobless claims, and Friday’s official employment report for December.

European Rates

Money markets are currently pricing the probability of a 25 basis point rate cut by the European Central Bank in February at below 25%.

To reassess those expectations, investors are watching for the euro area headline inflation data for January due on Wednesday.

The first ECB monetary policy meeting of the year begins Wednesday, with decisions due Thursday, and rates are widely expected to remain unchanged for the fifth consecutive meeting.

The Australian dollar rose broadly in Asian trading on Tuesday against a basket of major and minor currencies, resuming its strong gains against the US dollar after a two-day pause and moving back toward a three-year high, after the Reserve Bank of Australia raised interest rates for the first time since November 2023.

The Reserve Bank of Australia said inflation is likely to remain above target for some time, making it appropriate to raise the policy rate. It added that private demand is growing faster than expected, capacity pressures are stronger than previously assessed, and labor market conditions remain relatively tight.

The tightening step was broadly in line with global market expectations and followed data showing inflation reached its highest level in six quarters.

Price Overview

The Australian dollar rose 1.15% against the US dollar to 0.7034, from an opening level of 0.6954, and recorded a session low at 0.6946.

The Australian dollar had closed Monday down 0.2% against the US dollar, marking a second straight daily loss, amid corrective trading and profit-taking after reaching a three-year high at $0.7094.

Reserve Bank of Australia Decision

In line with expectations, the RBA’s monetary policy board decided on Tuesday to raise the benchmark interest rate by 25 basis points to 3.85%, marking the first Australian rate increase since November 2023, after holding rates unchanged at the previous three meetings.

The bank said private demand is expanding faster than expected, capacity constraints are greater than previously estimated, and labor market conditions remain somewhat tight. It noted that inflation pressures increased markedly in the second half of last year.

The RBA added that economic growth is running stronger than expected and inflation is likely to stay above target for a period, justifying the decision to raise the policy rate.

RBA Governor Michele Bullock Comments

RBA Governor Michele Bullock said:

Inflation remains too high.

We cannot allow inflation to move out of control.

There is concern about the persistence of elevated inflation.

A 50 basis point rate hike was not discussed.

The board does not have a preset path for interest rates.

The board will remain cautious on rates.

We aim to lower inflation while preserving labor market strength.

A sustained rise in the Australian dollar would help reduce import prices.

It is unclear whether this will become a full tightening cycle.

Nothing can be ruled out.

The board will closely monitor incoming data.

Quarterly inflation readings need to decline.

Australian Rate Expectations

After the meeting, pricing for a 25 basis point RBA rate hike in March remained below 50%.

Market pricing for a 25 basis point hike in May rose to above 80%.

Investors are awaiting further data on inflation, unemployment, and wages in Australia to reassess the rate outlook.

Analyst Views

Harry Murphy Cruise, Head of Economic Research at Oxford Economics Australia, said that with the RBA now expecting a slower decline in inflation, risks clearly lean toward a series of rate increases rather than a single move, especially given that the latest decision was unanimous.

Abhijit Surya, Asia-Pacific Chief Economist at Capital Economics, said the RBA clearly sees the path to lower inflation as long and difficult. He expects only one more rate hike in May, but noted that since the bank does not expect core inflation to return to the midpoint of the 2%–3% target band until early 2028, it may ultimately need to raise rates higher than currently projected.

The collapse in precious metals prices extended into broader markets during Asian trading on Monday, triggering a wide selloff across many stocks that had been among last year’s top performers.

Silver fell as much as 14.2% to a low of $72.63, while gold dropped up to 7.5% to $4,499.34.

Below are selected analyst comments from across the markets:

Christopher Forbes, Head of Asia and Middle East, CMC Markets: “We are in risk-reduction and deleveraging mode — a clearing of the leverage built up in the system. Easy and cheap access to risk through concentrated positions, especially among retail investors, is now being unwound.”

Gregor Gregersen, Founder, Silver Bullion, Singapore: “In physical markets, we have been experiencing shortages in retail silver products for months. These shortages are now worsening significantly. We see suppliers — and even some institutional suppliers — raising premiums, while others have stopped taking new orders altogether. In regions such as China, Dubai, and India, physical silver prices are trading far above Western spot prices, creating major distortions and disruptions.”

He added: “A year ago, we priced silver bars at a premium of $0.60 to $0.70 above spot. Today, premiums are in the $3.50 to $4.50 range, and small retail bars sometimes carry premiums of up to $8 above spot. Our focus now is managing strong demand amid limited supply and determining how much further premiums on physical silver need to rise.”

Mark Matthews, Head of Asia Research, Julius Baer, Singapore: “The asset most directly affected by Federal Reserve policy is US Treasuries. Their yield barely moved on the Warsh nomination news. So precious metals — which are less directly tied to Fed policy — cannot have collapsed because of that nomination. It was simply a same-day coincidence.”

He added: “The more likely explanation is that precious metals prices fell because they had risen too sharply the week before. Once profit-taking began, downside momentum accelerated quickly.”

He continued: “Prices could fall further from here, and perhaps should, given oil is down 5% today and usually leads the commodity complex. But once investors feel the precious metals market has stabilized, they will likely return quickly, since the two core drivers — a weaker US dollar and rising central bank gold holdings — have not changed.”

Oriana Liza, Sales Trader, CMC Markets, Singapore: “We have seen a major increase in funding and activity over the weekend and early this morning from clients seeking to protect positions if they do not want to liquidate or realize losses. This is a natural market reaction — such moves trigger fear and a surge in inquiries.”

James Ooi, Market Strategist, Tiger Brokers, Singapore: “The equity selloff is partly driven by margin calls following the sharp collapse in gold and silver, along with Oracle’s $50 billion fundraising plan and the broader crypto market decline. Political uncertainty around Kevin Warsh potentially leading the Fed has also weighed on sentiment. While he appears supportive of rate cuts, his preference for balance sheet reduction still points to tighter overall financial conditions.”

Mark Phelan, Chief Investment Officer, Lucerne Asset Management, Singapore: “This looks less like a single catalyst and more like a classic deleveraging and liquidity squeeze. Crowded leadership trades, systematic selling, and margin-driven liquidation usually hit what can be sold first. For precious metals, the speed and scale suggest position liquidation more than a clear macro repricing.”

He added that early safe havens in such phases are typically US dollar cash and short-term high-quality bonds, while traditional hedges can temporarily fail if moves are leverage-driven rather than fundamental.

Seo Sang-young, Analyst, Mirae Asset Securities, Seoul: “A volatility shock in commodities, especially gold and silver, triggered a liquidity shock for institutional investors through margin calls. That led to sharp declines in Bitcoin and equities. We do not yet see widespread retail margin calls, but panic selling is dominating and volatility is likely to remain elevated.”

Christopher Wong, Strategist, OCBC, Singapore: “The continued selloff in precious metals reflects a mix of technical and sentiment pressures. Margin-linked selling and stop-loss triggers have amplified the move, while sensitivity to the US dollar, yield repricing, and Fed policy uncertainty remains high.”

CME Metals Trading Jumps Despite Margin Hikes with Volumes Up 18%

CME Group reported a new record in daily metals trading volume on Tuesday, highlighting growing reliance on listed precious metals derivatives amid ongoing market uncertainty.

Trading in metals futures and options reached 3,338,528 contracts on January 26, surpassing the previous record of 2,829,666 contracts set on October 17, 2025, an increase of 18%.

CME said the surge was led by strong demand for precious metals, particularly silver. Micro silver futures posted a daily record of 715,111 contracts, while open interest reached an all-time high, indicating new positions rather than only short-term turnover.

CME linked the activity to macro uncertainty, elevated volatility, and rising price risk, noting that traders are increasingly using listed derivatives to hedge and adjust exposure.

The exchange also confirmed further margin requirement increases after sharp price swings and has shifted margin calculations from fixed dollar amounts to percentage-based requirements.

Higher Margins Add Pressure After Volatility Spike

CME said margin increases followed routine volatility reviews to ensure sufficient collateral coverage. However, the timing adds strain on smaller traders already hit by large losses.

Gold and silver prices plunged after the Warsh Fed nomination news and a stronger dollar, which made metals more expensive for overseas buyers. Analysts noted that crowded leveraged positioning — especially in silver — accelerated forced selling once prices broke lower.

The selloff spread beyond futures markets. Mining shares and leveraged silver ETFs posted severe losses, with some funds on track for their worst day on record.

Several strategists described the move as a broad crowded-trade unwind rather than a structural shift in long-term fundamentals, noting that central bank diversification trends and reserve reallocation away from dollar assets remain longer-term supportive themes for precious metals.