Gold held near its lowest close in over three months as investors sold the metal during a sharp stock market decline. Trading around $4,025 an ounce, gold fell nearly 3% in the prior session to its weakest level since July 20. US equities dropped while Treasury yields plunged by up to 20 basis points, reflecting a flight to safety as traders hedged risk.
Analysts attributed the selloff to liquidity demands, with gold often sold to meet margin calls during market stress. Justin Lin of Global X ETFs noted gold was approaching a critical support level at $3,900 an ounce. Despite near-term pressure, expectations for Federal Reserve rate hikes have diminished, with the probability of a hike next week below 10%. Concerns over AI investment sustainability and potential capital outflows from the US are expected to support gold.
A V-shaped recovery is anticipated, driven by lower rates, a weakening dollar, and faltering AI trade momentum. Spot gold was little changed at $4,024.48, while silver, platinum, and palladium showed minor movements.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing