- Gold prices have dipped below $5,000, falling nearly 1% to around $4,985 per ounce on Monday as traders take profits following last week’s rally.
- The decline is attributed to profit-taking and thin market liquidity, with key Asian markets like China closed for the Lunar New Year holiday through February 23.
- Analysts remain structurally bullish, with ANZ Group Holdings maintaining a 2026 forecast of $5,800 per ounce, though near-term pressure persists.
- Market watchers are closely monitoring the upcoming US-Iran talks and the return of Chinese traders to determine gold’s next major price movement.
Gold’s recent rally faced a sharp reversal on Monday, with prices slipping below the critical $5,000 mark to trade near $4,985 per ounce. This decline of nearly 1% has reignited fears of a deeper correction following last week’s surge.
Profit-taking directly triggered this sudden gold price drop, according to market reports. Softer-than-expected U.S. inflation data, which came in at just 0.2% for January, had initially fueled a 2.4% rally on Friday.
Consequently, a thin trading environment exacerbated the sell-off. Major market participant China is on holiday for Lunar New Year, leaving Asian sessions unusually quiet until February 23.
Meanwhile, cautious sentiment ahead of scheduled US-Iran talks is adding further pressure. Spot gold was changing hands at $4,992 at the time of writing, while MCX April gold futures in India fell 0.70%.
Vantage Markets analyst Hebi Chen noted, “With China and parts of the broader Asian market on holiday, gold is likely to see weaker liquidity and a calmer tone.” However, structural support for the metal remains intact.
ETF holdings stood at a robust 100.13 million ounces as of February 13, near August 2022 highs. COMEX registered inventory has, however, fallen over 27% from its April 2024 peak to 17.57 million ounces.
Chen added, “Structurally, the metal continues to show resilience, the macroeconomic backdrop has been strong but not disruptive, and technical support remains in place.” Major banks maintain a positive long-term outlook.
ANZ Group Holdings predicts bullion could reach $5,800 per ounce by the second quarter of 2026. Some physical buyers in Dubai and India are already treating the dip as a buying opportunity ahead of Eid demand.
Ultimately, gold’s near-term trajectory hinges on Chinese market activity post-holiday and geopolitical developments. The metal’s volatility was highlighted by its late-January record above $5,595 and subsequent collapse below $4,500 within days.
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