Gold Prices Drop More Than 1% Amid Thin Trading and Profit-Taking
February 16, 2026 — By Pablo Sinha, Reuters
Gold prices experienced a notable decline on Monday, falling over 1% as thin trading volumes and profit-taking weighed on the market. The drop follows a sharp 2.5% surge in gold prices last week driven by U.S. inflation data. The subdued trading activity is largely attributed to simultaneous public holidays in key markets: U.S. markets were closed for Presidents’ Day, while China’s markets remained shut for the Lunar New Year celebrations from February 15 to 23. By 07:26 GMT, spot gold had trimmed some of its earlier losses but was still down 0.9%, trading at $4,997.59 per ounce after dipping more than 1% earlier in the session. U.S. gold futures for April delivery posted a 0.6% decline, settling at $5,017.20 per ounce.
Market Dynamics and Analyst Insights
“Gold has given back some of Friday’s post-CPI gains today due to thinner trading conditions and a lack of fresh upside catalysts,” explained Tim Waterer, chief analyst at KCM. He also cited profit-taking as a contributing factor to the decline. Waterer highlighted the importance of the U.S. dollar’s trajectory, stating, “It will likely require the dollar to resume its downtrend for gold to push toward the $6,000 mark before the end of the year.”
The recent volatility in gold prices comes in the wake of U.S. consumer price inflation (CPI) data released last Friday, which showed a 0.2% increase in January following an unrevised 0.3% gain in December. This slightly lower-than-expected rise in inflation sparked optimism that the Federal Reserve may hold interest rates steady at their upcoming meeting on March 18. Current market expectations reflect around 75 basis points of rate cuts this year, with the first anticipated in July.
Non-yielding assets like gold tend to perform well in low-interest-rate environments, making central bank monetary policy decisions a key factor for bullion prices.
Geopolitical Concerns and Precious Metal Movements
Amidst market uncertainties, geopolitical tensions have also surfaced. U.S. military preparations are reportedly underway for a possible weeks-long operation against Iran, contingent upon authorization from President Donald Trump. Such developments could potentially escalate into a more serious conflict, which often influences safe-haven demand for precious metals.
Silver, another benchmark precious metal, also declined on Monday, with spot silver dropping 0.8% to $76.82 per ounce after an earlier 3% fall. Platinum prices slipped 0.7% to $2,048.15 per ounce, while palladium held steady at $1,685.64. Market Context
The subdued trading seen during the session reflects the impact of concurrent holidays in two of the world’s largest markets. This thin liquidity often leads to heightened volatility and price swings, as market participants adjust positions or take profits following significant moves, such as last week’s inflation-driven gains.
As markets reopen fully following the holiday breaks in the U.S. and China, investor focus will remain on inflation trends, Federal Reserve policy signals, and geopolitical developments — all key variables that will shape precious metal prices in the coming months.
Reporting by Pablo Sinha in Bengaluru; Editing by Sumana Nandy and Harikrishnan Nair.
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