Spot gold was 1.3% lower at $5,330.20 an ounce.
The metal reversed course, falling more than 5% to a session low of $5,109.62 after touching a record high of $5,594.82 earlier in the session.
U.S. gold futures for February delivery settled 0.3% lower at $5,318.40.
“We are seeing a dramatic sell-off after precious metals made new recent all-time highs,” said David Meger, director of metals trading at High Ridge Futures.
However, spot gold prices are still up about 24% for the month and 7% so far this week.
UBS on Thursday raised its gold price forecast to $6,200 for the first three quarters of the year, while projecting it to decline to $5,900 by the end of 2026.
From crypto money to central banks, demand for gold is widening as “precious metals are well in the limelight and investors always like to go where they can get high returns,” said GoldSilver Central managing director Brian Lan.
Adding to geopolitical uncertainty, U.S. President Donald Trump on Wednesday pressed Iran to negotiate a nuclear deal, while Tehran threatened retaliation against the U.S., Israel, and allies.
On Wednesday, crypto-group Tether’s CEO said it plans to allocate 10%-15% of its investment portfolio to physical gold, while the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, saw holdings at a nearly 4-year high.
The U.S. Federal Reserve left rates unchanged on Wednesday, as investors awaited Trump’s announcement of a replacement for central bank chair Jerome Powell, whose term ends in May. Markets expect the central bank to next trim rates in June.
Spot silver lost 2.1% at $114.141 an ounce after reaching $121.64. It has surged more than 60% so far this month, fuelled by supply deficits and momentum buying.
The silver, platinum and palladium markets are small relative to gold or the S&P 500, making them vulnerable to speculative inflows that have left prices “totally detached from where physical demand is robust,” said Guy Wolf, global head of market analytics at Marex.