LONDON, 16 February 2026 – Gold prices edged lower after briefly surging above the historic US$5,000 per ounce threshold, as traders moved to lock in gains following recent bullish momentum fuelled by expectations of interest rate cuts and easing inflation concerns.
Bullion declined as much as 0.6% in early trading after climbing sharply in the previous session, highlighting volatility as investors reassess the precious metal’s near-term trajectory following its milestone breakout.
Profit-Taking Emerges After Historic Price Breakout
Gold’s retreat comes after prices climbed above US$5,000 per ounce, a psychologically significant milestone reflecting strong investor demand for safe-haven assets.
The recent rally was supported by softer US inflation data, with the consumer price index rising just 0.2% in January, easing fears of persistent inflation and strengthening expectations that the US Federal Reserve may begin cutting interest rates.
Lower interest rates typically support gold prices, as the metal does not offer interest income, making it more attractive relative to yield-bearing assets when borrowing costs decline.
However, the surge above US$5,000 triggered profit-taking activity, a normal market reaction after rapid price appreciation.
Interest Rate Expectations Remain Key Driver
Monetary policy expectations remain the dominant factor influencing gold’s trajectory.
Investors are closely watching signals from the Federal Reserve regarding the timing and pace of potential interest rate cuts. Lower rates reduce the opportunity cost of holding gold, which often leads to increased demand.
The precious metal has also benefited from broader macroeconomic uncertainties, geopolitical tensions, and strong central bank buying.
Safe-Haven Demand Continues to Support Long-Term Bullish Outlook
Despite short-term volatility, gold’s long-term outlook remains supported by structural factors, including:
- Central bank diversification away from traditional reserve currencies
- Persistent geopolitical uncertainty
- Inflation hedging demand
- Global financial market volatility
These factors have driven gold’s historic rally, pushing prices to unprecedented levels in 2026.
Implications for Asian Investors and Commodity Markets
For Asian investors, gold’s surge above US$5,000 represents a significant milestone, reflecting strong demand for safe-haven assets amid shifting global monetary conditions.
Gold plays a critical role in Asian investment portfolios, particularly in countries such as China, India, and Malaysia, where it serves as both an investment asset and a store of value.
The metal’s price trajectory is likely to remain closely linked to US monetary policy, inflation trends, and global economic stability.
Investor Perspective: Volatility Expected After Historic Rally
Gold’s pullback highlights the natural cycle of profit-taking following strong rallies.
However, the broader bullish trend remains intact, supported by expectations of lower interest rates, ongoing geopolitical uncertainty, and continued central bank accumulation.
For investors, gold remains a strategic hedge against economic uncertainty, currency volatility, and inflation risk.
The key factors to watch in the coming months include US Federal Reserve policy decisions, inflation data trends, and global geopolitical developments, all of which will influence gold’s next directional move.
