Gold prices fell under $3,300 by Friday. This drop represents a significant turnaround in the market following a recovery earlier in the week. In fact, optimism is increasing over a possible de-escalation of the ongoing US-China trade war. This condition has been the foremost driver of gold’s strength over the past several months, leading the recent pullback.
After gold’s bounceback on Thursday, that surge turned out to be a flash in the pan. As trading opened up Friday, the precious metal could not hold onto those increases closing below the $3,300 level. This decline is in line with a growing market optimism that is profoundly bullish on improved U.S.-China trade relations among the two economic juggernauts.
US President Donald Trump recently hinted at the beginning of negotiations aimed at resolving ongoing trade disputes, further contributing to positive market sentiment. Now investors are starting to react to these positive developments. Consequently, gold prices have mostly traded sideways in a broad range. The bulls have remained in control as gold continues to trade above $3,300. This recent drop marks a move away from confidence in the market by investors.
Market analysts observe that gold prices may continue to fluctuate as traders respond to news regarding US-China negotiations and other economic indicators. In the consolidation phase, investors are on high alert and measuring their risk at every turn. They offset the attractive qualities of gold as a safe haven with upside from thawing in US-China trade relations.