Gold holds biggest loss since December on concern rally overdone

The 14-day relative strength index — a gauge of the pace and intensity of moves — showed gold reached overbought levels earlier in the week. Bloomberg

Gold steadied following its largest one-day decline in two months, with the slump sparked by investor concern that the metal’s recent record-breaking rally may have been overdone.

Bullion traded near $2,886 an ounce, after tumbling 1.6% on Friday. The 14-day relative strength index — a gauge of the pace and intensity of moves — showed gold reached overbought levels earlier in the week. Traders have also been studying the Federal Reserve’s interest-rate trajectory along with the risk of market disruptions due to US President Donald Trump’s tariff threats.

Speculation has increased that the threats are mainly being used as a negotiating tool by Trump. His administration’s tariff policies have become increasingly muddled due to delays and exclusions, with geopolitical and economic uncertainties tending to add to bullion’s haven appeal.

Traders were also studying the latest US economic data for clues about the Fed’s likely easing path, after a report on Friday showed retail sales slumped by the most in nearly two years. The figures prompted traders to restore bets that the central bank will cut interest rates by September. Lower borrowing costs typically benefit gold, as it doesn’t pay interest.

Money managers cut their bullish wagers on gold to a four-week low in the week ending Feb. 11, according to the latest Commodity Futures Trading Commission report on Friday.

Despite Friday’s fall, gold still notched its seventh consecutive weekly advance, the longest winning streak since 2020. It’s been helped partly by continued buying from central banks including China’s, along with rising holdings in bullion-backed exchange-traded funds. Bullion posted an all-time high of $2,942.68 an ounce on Tuesday.

Spot gold edged up 0.1% to $2,886.23 an ounce at 8:16 a.m. in Singapore, following a weekly gain of 0.8%. The Bloomberg Dollar Spot Index was steady. Silver dipped. Palladium and platinum gained.