After temporarily rebounding on Thursday, gold prices dipped back below the $3,300 threshold on Friday. Gold prices have dropped as optimism grows. A lot of this rosy feeling is based on belief in a potential de-escalation of the protracted US-China trade war. Market analysts noted a roller-coaster ride for gold trading as investors scrambled to respond to these news.
On Friday, gold was still trading under $3,300, a measure of how the market has been generally risk averse. The recent decline marks a historic turnaround in the market. After a short-lived recovery, gold has got a lot of traders rethinking their positions. The price of the usurious metal follows global economic indicators almost tick-for-tick. Geopolitical tensions are again a large part of the influencing factor on investor behavior.
US President Donald Trump suggested starting point of negotiations to reduce trade conflict between the two countries. This announcement has already sent waves of increased market optimism across the country. Consequently, the prevailing sentiment among many investors is to turn their backs on gold and other traditional safe-haven assets. Similarly, the hope that improved trade relations automatically improves the global economic outlook has helped boost gold prices into a solid range.
Even with the recent pullback, bulls in the gold market still have an overall advantage as long as prices stay above the $3,300 level. Analysts suggest that as long as gold trades within this range, there is potential for recovery should market conditions shift again. It will be the balance between these economic developments and shifting investor sentiment that will play the important role in shaping how gold prices evolve moving forward.