(Bloomberg) — Gold slipped further below $5,000 an ounce in thin trading, with much of Asia closed for the Lunar New Year and after a US holiday on Monday.

Bullion fell as much as 1.4% on Tuesday, having lost 1% in the previous session. The metal had rallied briefly on Friday when modest US inflation data boosted the case for the Federal Reserve to trim interest rates. Lower borrowing costs are a tailwind for non-yielding precious metals.

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A wave of speculative buying pushed a multiyear rally to breaking point in late January, with gold surging to a record above $5,595 an ounce. An abrupt, two-day rout at the turn of the month pulled the metal back to near $4,400, but it has since regained roughly half of its losses. Trading has been choppy since.

Many banks — including BNP Paribas SA, Deutsche Bank AG and Goldman Sachs Group Inc. — have forecast that prices will resume their upward trend, with the factors that underpinned gold’s steady ascent set to persist. These include heightened geopolitical tensions, questions over the Fed’s independence and a wider shift away from currencies and sovereign bonds.

“We continue to see two main supportive macro factors for gold: inflation and dollar debasement,” analysts at Jefferies including Fahad Tariq wrote in a note, raising their 2026 price forecast to $5,000 an ounce from $4,200. Investors and central banks concerned about these factors “have only really one option: hard assets,” they said.

In the near term, however, downside risk will increase the longer that bullion remains below $5,000, as this “would discourage bullish traders further in light of the recent volatility,” Fawad Razaqzada, an analyst at City Index, said in a note.

Spot gold fell 0.5% to $4,967.82 an ounce as of 10:25 a.m. in Singapore. Silver slipped 0.4% to $76.30 an ounce. Platinum was little changed, while palladium fell 1.1%. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after ending the previous session 0.1% higher.

–With assistance from Paul-Alain Hunt.

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