Gold retreats after Trump's Fed chair choice firms dollar

Gold hit a record peak of $5,594.82 on Thursday and remains on track for a more than 17% rise this month, marking its sixth consecutive monthly increase.

• Gold prices fell up to 8%, briefly dipping below $5,000 per ounce on Friday
• Trump named Kevin Warsh as Fed chair, triggering profit-taking in gold
• Despite drop, gold is set for its strongest monthly gain since 1982

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Gold prices fell as much as 8% on Friday to briefly dip below the $5,000 per ounce mark, as the dollar firmed following President Donald Trump's announcement of his choice for Federal Reserve chair, even as bullion was set for its strongest monthly gain since 1982.

Spot gold dropped 5.8% to $5,081.52 per ounce at 09:37 a.m. ET (1437 GMT), after retreating to an intraday low of $4,957.53 earlier. U.S. gold futures for February delivery slipped 4.1% to $5,079.60.

The selloff, described by analysts as profit-taking, also pressured other precious metals.

The triggers behind the sell-off could be a combination of factors, ranging from the Fed Chair announcement to broader macro flows, said Suki Cooper, global head, commodities research at Standard Chartered Bank.

Whether we look at the dollar or expectations for real yields, a combination of these drivers has helped trigger profit-taking, she added.

Trump named former Federal Reserve Governor Kevin Warsh as his choice to succeed Jerome Powell as Fed chair in May, placing a frequent critic of the central bank in a key leadership role.

Gold hit a record peak of $5,594.82 on Thursday and remains on track for a more than 17% rise this month, marking its sixth consecutive monthly increase.

The U.S. dollar index gained 0.4%, rebounding from a four-year low earlier this week and making greenback-priced gold more expensive for overseas buyers. [USD/]

Meanwhile, Joe Cavatoni, Senior Market Strategist, Americas, and Head of Public Policy, US, World Gold Council said, "in an environment shaped by policy uncertainty, rising debt burdens and geopolitical risk, gold is increasingly being viewed as a strategic portfolio allocation rather than a short-term trade."

Gold premiums in India hit decade-highs on investment demand, while China saw gains on jewellery and investment interest. [GOL/AS]

Among other precious metals, spot silver was down 13.9% at $99.94 an ounce after dropping as low as $95.79. The metal hit a record high of $121.64 on Thursday and has surged 40% this month, on track for its best monthly performance.

Spot platinum lost 12.1% to $2,310.11 an ounce and palladium plunged 8.3% to $1,839.01.