Gold prices fell sharply this week as geopolitical tensions—previously a major driver—started to ease. After recent worries about US-EU and US-China trade stalled talks pushed gold to new highs, weekend breakthroughs quickly reversed that trend.
Progress in US-EU and US-China trade talks lowered demand for safe-haven assets like gold. Futures dropped by $59.30 to $3,306.40, as investors rotated into equities. Markets rallied, with the NASDAQ and S&P 500 up 2%, showing risk appetite rising.
Technically, gold has failed to make higher highs for the third time since April 22. This pattern may signal weakening bullish momentum. Despite this, banks like Citi remain optimistic, revising short-term targets up to $3,500.
Still, a new concern looms: saturation. About 0.5% of global GDP is now invested in gold, the highest in 50 years. If no new investors enter the market, further gains may be hard to come by.
In the end, future gold direction depends on whether trade peace holds or more volatility returns. Either way, the market is growing less sensitive to political noise, focusing more on actual policy changes.
