PRECIOUS-Gold slips nearly 8% after Trump's Fed chair choice firms dollar

By Anmol Choubey

Jan 30 (Reuters) - Gold prices fell as much as 8% on Friday, dipping below the $5,000 per ounce mark, as the dollar firmed following President Donald Trump's announcement of his choice for Federal Reserve chair, even as bullion was set for its strongest monthly gain since 1999.

Spot gold XAU= dropped 7.4% to $4,997.39 per ounce at 11:30 a.m. ET (1630 GMT), after retreating to an intraday low of $4,957.53 earlier. U.S. gold futures for February delivery slipped 6.1% to $5,028.

The selloff, described by analysts as profit-taking, also pressured other precious metals.

The triggers behind the sell-off could be a combination of factors, ranging from the Fed Chair announcement to broader macro flows, said Suki Cooper, global head, commodities research at Standard Chartered Bank.

Whether we look at the dollar or expectations for real yields, a combination of these drivers has helped trigger profit-taking, she added.

Trump named former Federal Reserve Governor Kevin Warsh as his choice to succeed Jerome Powell as Fed chair in May, placing a frequent critic of the central bank in a key leadership role.

Gold hit a record peak of $5,594.82 on Thursday and remains on track for a nearly 16% rise this month, marking its sixth consecutive monthly increase.

The U.S. dollar index .DXY gained 0.4%, rebounding from a four-year low earlier this week and making greenback-priced gold more expensive for overseas buyers. USD/

Meanwhile, Joe Cavatoni, Senior Market Strategist, Americas, and Head of Public Policy, US, World Gold Council said, "in an environment shaped by policy uncertainty, rising debt burdens and geopolitical risk, gold is increasingly being viewed as a strategic portfolio allocation rather than a short-term trade."

Gold premiums in India hit decade-highs on investment demand, while China saw gains on jewellery and investment interest. GOL/AS

Among other precious metals, spot silver XAG= was down 18% at $95.19 an ounce after dropping as low as $95.75. The metal hit a record high of $121.64 on Thursday and has surged more than 30% this month, on track for its best monthly performance since July 2020.

Spot platinum XPT= lost 15.5% to $2,220.96 an ounce and palladium XPD= plunged 12.1% to $1,763.50.