Gold Prices Drop Below 4 Thousand Dollars

Gold Prices Continue to Decline

Gold is retreating to the level of $4,000 per ounce amid concerns that the market has overheated after reaching record levels. This decline gained momentum as the precious metal, often favored by investors, lost 6% of its value in the last two sessions.

Technical Correction and Selling Pressure

Spot gold experienced a loss of about 0.5% on Thursday. This decline was compounded by strong selling pressure from investors exiting exchange-traded funds (ETFs). According to Bloomberg data, the outflow from gold-backed ETFs on Wednesday was recorded as the largest in the last five months.

Geopolitical Tensions and Trade Agreement Expectations

Investors are also assessing the likelihood of a U.S.-China trade agreement in the context of geopolitical tensions that have increased demand for safe-haven assets. Hebe Chen, an analyst at Vantage Global Prime, stated, "After a prolonged rise, gold is retreating like an over-stretched rubber band. A price level above $4,000 indicates a technical correction rather than a fundamental breakdown."

Year-to-Date Increase Continues

However, it is worth noting that gold has gained approximately 55% in value since the beginning of the year. Moreover, expectations that the U.S. Federal Reserve will implement at least a quarter-point interest rate cut by the end of the year have supported gold prices.

Gold Prices and Market Situation

As of 10:35 AM Singapore time, gold had declined to $4,083 per ounce. The Bloomberg Dollar Spot Index also showed a slight increase. Other precious metals such as silver, palladium, and platinum continue to exhibit a downward trend.