The reasons for the significant drop in gold prices on January 30, 2026, mainly include the following points:

1. Profit-taking and technical correction

From 2025 to early 2026, gold prices increased by more than 70%, accumulating substantial profit. When prices reached high levels above $5500 per ounce, investors tended to lock in profits, leading to concentrated selling. Technical indicators such as RSI showed overbought conditions, indicating a demand for correction, further exacerbating the price decline.

2. Shift in Federal Reserve policy expectations

The Federal Reserve maintained interest rates in the January meeting and hinted at a decreased probability of rate cuts in the first half of the year, breaking the market's previous strong expectations for significant rate cuts. As a non-interest-bearing asset, gold's appeal weakened due to rising holding costs, causing funds to shift towards interest-bearing assets such as U.S. Treasury bonds and the dollar, suppressing gold prices.

3. Dollar index rebound

Influenced by expectations of a hawkish Federal Reserve policy, the dollar index rebounded, making gold priced in dollars more expensive for non-dollar investors, leading to decreased demand and subsequently pushing prices down.

4. Easing geopolitical tensions

U.S. President Trump reached an agreement with Senate Democrats to avoid a government shutdown, and the announcement of ceasefire arrangements related to the Russia-Ukraine conflict reduced market risk aversion, decreasing the demand for gold as a safe-haven asset.

These factors combined led to the significant drop in gold prices on January 30, 2026.