Gold prices stabilized early Wednesday, trading around $2,920.4 per troy ounce after a turbulent Tuesday session that saw futures drop 1.49% to $2,918.8.The decline followed Mondays record high of $2,956.19, as investors locked in profits amidst growing economic uncertainties.
The recent pullback comes after golds meteoric rise since mid-December, when prices surged from $2,599.60 to nearly $3,000a 14.46% rally over two months.Analysts attribute Tuesdays sell-off to profit-taking by traders who deemed the upside potential temporarily exhausted.
Commerzbank highlighted a reduction of nearly 12,000 long contracts by managed money funds, signaling a cooling of bullish sentiment despite net long positions exceeding 200,000 contracts.Geopolitical and economic factors continue to underpin golds appeal as a safe-haven asset.
President Donald Trumps escalating tariff threats on Canadian and Mexican imports have heightened fears of a global trade war, boosting demand for gold.Weak U.S.
consumer confidence data and falling bond yields further supported the metals broader upward trajectory, though profit-taking tempered gains.
Globally, key markets reflected mixed dynamics.Gold Retreats from Record Highs as Profit-Taking and Tariff Concerns Shape Markets.
(Photo Internet reproduction)In New Yorks COMEX, heavy trading volumes underscored investor repositioning after the sharp correction.
Londons OTC market reported tight supply conditions amid strong physical demand, with leasing rates spiking to 12%.Gold Market OutlookMeanwhile, India saw a steep drop in February gold importsdown 85% year-over-yeardue to record-high local prices dampening jewelry demand.
Technical indicators suggest gold remains in a bullish channel but faces resistance near $2,940 and support at $2,905.A break below $2,900 could lead to further declines toward $2,877, while a rebound above $2,965 might reignite upward momentum.
ETF flows reflect sustained investor interest despite recent volatility.
Gold-backed ETFs saw inflows of 52.4 metric tons last week, valued at roughly $5 billion.However, some outflows occurred during Tuesdays correction as traders adjusted positions.
Market sentiment remains cautiously optimistic for golds long-term prospects amid geopolitical risks and inflation concerns.Analysts project that prices could test the $3,100 mark later this year if economic uncertainties persist.
For now, traders await Fridays U.S.
Personal Consumption Expenditures report for further clues on Federal Reserve policy and its impact on gold markets.