Gold prices fell in the first trading sessions of 2026, retreating from record highs as thin market liquidity and investor profit-taking weighed on the precious metal, analysts said.
Spot gold lost 4.4 percent over the past week, falling to a two-week low of US$4,274 per ounce from US$4,542 at the start of the week, before recovering some losses to close at US$4,332, according to technical analysis from Gold Bullion.
The metal entered the new year after a strong 2025 rally, during which prices surged nearly 65 percent, marking gold’s best annual performance since 1979. That rally was driven by expectations of U.S. Federal Reserve interest rate cuts, a weaker dollar, and easing inflation pressures, all of which typically boost demand for non-yielding assets like gold.
“Reduced liquidity and lower trading volumes during the holiday period weakened momentum and encouraged profit-taking,” Gold Bullion said, noting that the pullback is largely a technical correction rather than a fundamental shift in market conditions.
Geopolitical risks could continue to support gold prices, the firm added, highlighting repeated attacks in Venezuela’s capital some reports suggest involving U.S. operations as a potential catalyst for renewed safe-haven buying once markets fully reopen.
Market sentiment remains divided. Some analysts warn that gold may be entering overbought territory after last year’s dramatic rally, increasing the risk of short-term correction. Others point to continued central bank purchases and ongoing diversification of foreign reserves into gold as a source of underlying support.
Physical demand in Asia showed signs of recovery following the price correction. In India, dealers charged premiums of up to US$15 per ounce above official domestic prices, compared with discounts of $61 per ounce the previous week. In China, premiums also returned, with gold trading around US$3 above the global spot benchmark, reflecting improving consumer appetite.
Despite recent volatility, gold remains above the $4,300 per ounce level, suggesting strong investor interest amid continuing economic uncertainty.
