The price of gold (XAU/USD) faced downward pressure early on Monday, dipping to around $2,985 during the Asian trading session. This decline is largely attributed to profit-taking as traders adjust positions following a volatile U.S. stock market.
Gold’s recent drop coincided with a sharp sell-off in U.S. stocks on Friday, triggered by President Donald Trump’s announcement of new reciprocal tariffs on goods from multiple countries. In response, traders liquidated gold positions to free up cash for covering margin calls, compounding the precious metal’s decline.
Despite the downward movement, analysts believe gold’s downside may be limited due to strong underlying fundamentals. Rich Checkan, Chairman and CEO of Asset Strategies International, suggests that “bargain hunters will rush in next week to buy cheap gold and silver, helping the precious metals to rally again.”
Moreover, ongoing global economic uncertainties and rising geopolitical tensions are expected to support gold’s safe-haven appeal. Recent escalations in Ukraine, including Russian shelling in the Kherson region that wounded seven people, have further fueled these concerns.
“Despite the volatility, gold remains a reliable safe-haven asset for many investors,” commented Matt Simpson, Senior Analyst at City Index. As global risks continue to mount, gold may see renewed demand as investors seek refuge from market instability.
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