After a sharp rise on Wednesday, international gold prices retreated on Thursday as some investors opted to take profits before the long weekend. However, the price remained firmly above $3,300 per ounce, indicating that the overall market demand for gold as a safe haven remains strong.
Spot gold prices fell by 0.8%, to $3,317.87 per ounce, after temporarily reaching a record high of $3,357.40. Meanwhile, the U.S. June gold futures settled 0.5% lower at $3,328.40 per ounce. Since the start of the week, spot gold has risen by more than 2%.
The strong uptick in gold prices is mainly driven by geopolitical tensions and uncertainties in trade policies. U.S. President Trump has ordered investigations into all critical mineral imports, following previous investigations into drug and chip imports. The market widely fears that these investigations could precede new tariffs on these industries, leading to further escalation in global trade tensions.
Additionally, although the U.S. dollar index rebounded slightly on Thursday, it has shown a declining trend throughout the week. A weaker dollar typically enhances the appeal of gold for holders of non-dollar currencies, thus supporting the price of gold.
In the short term, investors should remain cautious of price volatility. Following gold's strong breakout to new highs, some short-term capital is cashing out at high points. Coupled with the upcoming Good Friday holiday, overall market trading is trending towards caution. If the stock market experiences another sharp adjustment, it could trigger margin calls in portfolios, further affecting precious metal prices.
In other precious metals, spot silver fell 0.9% to $32.44 per ounce; platinum was nearly unchanged at $967.08, while palladium dropped 1.5% to $956.92 per ounce.
Despite heightened short-term fluctuations, gold remains favored by the market due to its safe-haven properties, with future trends relying heavily on global trade policy developments, U.S. dollar movements, and changes in geopolitical risks.
