Gold prices declined in early European trading as market sentiment shifted towards greater risk appetite. After reaching an all-time high and testing the key psychological threshold of $3,500, the precious metal briefly dipped below $3,300 this morning — a drop of 6% from yesterday’s peak to today’s low. The current climate of uncertainty has brought heightened volatility in the markets, driven by erratic decision-making and sharp policy reversals by the US administration. The last two sessions serve as a clear example of this pattern. Yesterday, investors were spooked by President Trump’s perceived threats to the independence of the Federal Reserve, which undermined confidence in US assets. As a result, there was a broad sell-off in equities, Treasuries, and the US dollar, with capital rotating into gold. However, later in the day, President Trump backtracked, publicly ruling out any intention to dismiss the Fed Chair. This statement and remarks from the US Treasury Secretary questioning the logic of the ongoing trade war with China helped restore investor confidence. The shift in sentiment sparked a rebound in risk assets, while profit-taking led to a sharp pullback in gold prices. Against a backdrop of growing economic pessimism and uncertainty, the $3,300 level is now emerging as a key support zone — likely to trigger dip-buying activity whenever prices fall below it.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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