Gold prices fell today- What are the reasons for this decline and the most important factors affecting gold movements in the current period?
Gold prices fell 1.3% today, Tuesday, to around $5,160 per ounce, after four consecutive days of strong gains, as investors assessed the risks of US tariffs and renewed geopolitical uncertainty in the Middle East.
Despite this decline, analysts believe that the current downturn is a limited correction that does not change the overall trend for the yellow metal, especially as it continues to trade above the important psychological level of $5,000 per ounce, a level that reflects the strength of structural demand for gold as a safe haven.
US tariffs put pressure on markets
The administration of US President Donald Trump is seeking to revive its global tariff agenda, after the Supreme Court earlier overturned tariffs imposed last year.
The administration announced new tariffs of 10% effective Tuesday, with the threat of raising them to 15% later.
Trump also warned of the possibility of imposing tougher tariffs on countries that manipulate their trade agreements, raising market concerns about escalating trade tensions and their impact on global economic growth.
These developments have heightened market uncertainty and led to temporary profit-taking in gold after a strong rally.
Geopolitical tensions support gold
On the other hand, geopolitical escalation in the Middle East continues to provide fundamental support for gold prices, as investors increase their allocations to defensive assets as a hedge against risk.
Attention is currently focused on the upcoming talks between the US and Iran, which are set to resume on Thursday.
Trump has confirmed his preference for a negotiated agreement on the nuclear issue, but at the same time warned of dire consequences if the negotiations fail.
The continuation of these tensions keeps downward pressure on gold limited, despite short-term volatility resulting from movements in the dollar or bond yields.
What are investors watching now?
Investors are currently focusing on three key factors affecting gold prices:
- Developments in Middle East negotiations and their impact on global risk appetite.
- Movements in real US bond yields, which are inversely correlated with gold performance.
- The Federal Reserve's monetary policy expectations regarding interest rates in the coming period.
As long as geopolitical risks remain high and trade uncertainty persists, gold's ability to trade above $5,000 suggests that the uptrend remains intact, even with temporary corrections.
