Gold prices plummeted in a single day, halting their recent steep upward trend. Volatility is rapidly increasing as profit-taking orders, accumulated since the record high, are pouring in.
On the 5th (local time), gold futures for February delivery on the New York Mercantile Exchange (COMEX) traded at $4,861.40 per ounce, down 1.20% (approximately $59) from the previous day. At one point during the session, the decline widened, and the price fell by more than $130 from its all-time high.
Analysts believe this plunge represents a technical correction following the recent surge in recent weeks. Gold prices rose rapidly, threatening the $5,000 level in a short period of time, driven by a combination of geopolitical uncertainty, expectations of a shift in global monetary policy, and the prospect of a weaker dollar. This surge is interpreted as a massive influx of funds seeking short-term profits, and the widespread perception of a peak, leading to a sudden surge in selling pressure.
Furthermore, the negative environment for gold, created by signs of a short-term rebound in US Treasury yields and dollar flows, is also cited as a factor contributing to the downward pressure. Despite the continued preference for safe-haven assets, the increased price burden has forced investors to adjust their positions.
The market is weighing the possibility that this correction is a cooling-off process rather than undermining the medium- to long-term trend. However, given the potential for significant short-term volatility, the extent of further price adjustments and the formation of support levels are emerging as key variables that will determine future trends.
