Gold prices slipped sharply on Thursday, falling below the critical $3,300 level, as renewed strength in the US Dollar weighed on the precious metal. Investors grew cautious amid signs that optimism around a potential breakthrough in US-China trade talks may have been premature.
The fading hopes for a swift resolution to trade tensions spurred a flight to the greenback, traditionally seen as a safe-haven asset alongside gold. However, this time, dollar strength outweighed gold’s appeal, driving prices lower across global markets.
Adding to the pressure on bullion, recent U.S. economic data showed pockets of resilience, reinforcing expectations that the Federal Reserve may keep interest rates higher for longer. Higher rates tend to dampen the appeal of non-yielding assets like gold.
Despite the recent drop, some analysts believe gold’s longer-term outlook remains supported by underlying geopolitical risks and persistent concerns about global growth. However, in the short term, further downside cannot be ruled out if the dollar rally continues.
Traders now await fresh cues from upcoming U.S. data releases and any new developments on the trade front that could shift risk sentiment and influence demand for safe-haven assets.
