Gold prices fell to around $4,838 per ounce on Thursday, February 5, 2026, retreating from a two-day recovery as investors responded to hawkish signals from the Federal Reserve (Fed) and political uncertainty over the central bank’s leadership.
Federal Reserve Governor Lisa Cook stated on Wednesday that she would not support additional interest rate reductions, emphasizing persistent upside inflation risks despite signs of labor market stabilization. Cook, speaking at the Economic Club of Miami, said risks are tilted toward higher inflation, signaling a cautious stance on monetary policy.
The Fed cut short-term borrowing costs three times in late 2025, bringing the current range to 3.5 percent to 3.75 percent. Cook indicated that these reductions will continue to support the labor market, which has stabilized with unemployment at 4.4 percent in December, well below the 50-year pre-pandemic average of 6.2 percent.
Market sentiment was also affected by President Donald Trump’s nomination of Kevin Warsh as the next Fed chairman. Warsh, a former Fed governor who served from 2006 to 2011, is viewed by analysts as more hawkish than other contenders, leading markets to price in a slower pace of potential rate cuts. If confirmed by the Senate, Warsh will succeed Jerome Powell when Powell’s term expires in May.
However, Trump sought to reassure markets, stating he would not have nominated Warsh if he favored rate hikes and expressed confidence that the Fed will eventually resume cutting rates.
Geopolitical tensions added further caution to markets. The United States and Iran are scheduled to hold nuclear talks in Muscat, Oman, on Friday, February 7, 2026, following confirmation by Iranian Foreign Minister Abbas Araghchi. The talks come amid heightened tensions after Tehran’s crackdown on nationwide protests and military incidents in the Arabian Sea. Washington has not ruled out military strikes if diplomatic efforts fail.
Earlier this week, gold surged more than 6 percent, marking its largest intraday rise since 2008. The rally was driven by aggressive buying amid global economic uncertainties and persistent geopolitical risks.
Market analysts note that gold remains highly sensitive to monetary policy signals and geopolitical developments. The precious metal’s trajectory will likely depend on the Fed’s next moves and the outcome of ongoing United States-Iran negotiations.
