Gold Falls, Silver Rallies as Investors Reassess US Monetary Outlook

On Monday, February 2, 2026, Gold prices declined due to dampening investor sentiments caused by the firm US dollar, while silver rebounded after falling to a more than three-week low last week.

Silver Rebounds After Sharp Retreat

Spot gold slid 1.5% to $4,793.97 per ounce in early Asian trade, extending losses after touching a one-week low on Friday, January 30. Despite the pullback, bullion remains well below the record high of $5,594.82 per ounce reached last Thursday. Meanwhile, US gold futures for February delivery edged higher, rising 1.6% to $4,818.10 per ounce.

Silver moved in the opposite direction, gaining 1.6% to $85.98 per ounce as buyers stepped in following recent losses. The metal had surged to a record high of $121.64 per ounce last week before retreating sharply.

Focus on Federal Reserve Leadership

Market attention remains centered on US monetary policy developments, particularly President Donald Trump’s nomination of Kevin Warsh as Federal Reserve chair. Investors are evaluating how Warsh’s leadership could influence interest rate policy and the Fed’s balance sheet strategy.

The US dollar maintained recent gains as traders weighed expectations of a potentially tighter monetary stance under Warsh, who is widely known for favouring a smaller Federal Reserve balance sheet. A stronger dollar typically makes gold more expensive for holders of other currencies, reducing demand.

Rate-Cut Bets Still in Play

Despite near-term caution, markets continue to price in at least two interest rate cuts in 2026. Lower interest rates generally support gold, which does not offer yields like interest-bearing assets.

Also Read: Silver ETFs in Focus as Global Silver Prices Witness Record One-Day Fall Ahead of Budget 2026

Key Data to Watch This Week

Investors will monitor a series of manufacturing PMI releases from Japan, China, the UK, France, Germany, the Eurozone, and the United States for further clues on global economic momentum.

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