Gold Prices Slide Below $5,000 as Strong Dollar and Central Bank Outlook Weigh on Metals

Gold prices reversed early gains and moved lower during Asian trading on Thursday, pressured by a strengthening U.S. dollar and reduced demand for safe-haven assets. Investor focus has shifted toward upcoming central bank meetings and key U.S. labor market data, prompting traders to favor the greenback over precious metals.

Spot gold declined 1.1% to $4,912.26 per ounce by 21:17 ET (02:17 GMT), while April gold futures slipped 0.4% to $4,929.25 per ounce. The pullback followed a strong rebound on Wednesday, when spot prices climbed as high as $5,092.31 before falling back below the psychologically important $5,000 level by the end of the session.

One major factor weighing on gold prices was easing geopolitical tension. The United States and Iran confirmed that diplomatic talks are scheduled for Friday, reducing fears of an immediate military escalation in the Middle East. This development cooled safe-haven demand, which had previously supported gold during periods of heightened uncertainty.

A stronger U.S. dollar also contributed to losses in gold and other metals. Currency markets saw increased demand for the greenback ahead of interest rate decisions from the Bank of England and the European Central Bank, both expected later Thursday. Traders are also positioning ahead of the highly anticipated U.S. nonfarm payrolls report due Friday, which could influence expectations around future interest rate policy.

Dollar strength was further supported by political developments in the United States after President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair. Warsh is widely viewed as less dovish, with markets anticipating tighter monetary policy even if interest rates eventually decline.

Other precious metals followed gold lower. Spot silver dropped sharply, falling 6.9% to $82.3130 per ounce after posting a strong rally in the previous session. Despite its strong performance in recent months due to industrial demand, silver has faced increased volatility amid profit-taking and dollar gains. Spot platinum fell 3% to $2,167.59 per ounce, while benchmark copper futures on the London Metal Exchange eased 0.6% to $12,986 per tonne.

Overall, precious metal prices remain sensitive to currency movements, central bank signals, and global economic data, keeping investors cautious in the near term.