Gold prices (XAU/USD) experienced downward pressure early in the Asian session on Monday, dipping to around $2,985 amid profit-taking activities. The precious metal extended its losses as a sharp decline in the US stock market led traders to liquidate gold positions in order to generate liquidity to offset stock market losses.
The sell-off in US equities on Friday was largely driven by the need for cash to meet margin calls following US President Donald Trump’s announcement of new reciprocal tariffs on goods from various countries. However, analysts suggest that gold’s downside potential may be limited, with supportive fundamentals expected to drive a recovery. Rich Checkan, Chairman and CEO of Asset Strategies International, stated, “Bargain hunters will likely enter the market next week, pushing gold and silver prices higher.”
Furthermore, ongoing global economic uncertainty and rising geopolitical tensions could further strengthen gold’s appeal as a safe-haven asset. Recent developments, such as increased shelling in the Kherson region of Ukraine—resulting in casualties—have added to the growing sense of instability. Despite market volatility, Matt Simpson, Senior Analyst at City Index, emphasized that gold remains a reliable refuge for many investors.
