empty
25.04.2025 10:14 AM
Why Could Gold Prices Drop Significantly? (There's a chance gold will continue to decline while the CFD on the NASDAQ 100 futures contract may rise)

The beginning of actual negotiations could lead to a significant drop in gold prices in the near future.

In previous articles, I suggested that the previously surging price of gold could undergo a major correction amid the launch of talks between Beijing and Washington regarding tariffs.

To recap, back in November 2023, the price of the yellow metal broke through the strong psychological resistance level of $2,000 per ounce, and from there began its almost uninterrupted rise. At the time, there were several reasons for the increased demand, three of which stand out. Two of them are interconnected: the escalation of global tensions driven by the war between the West and Russia in Ukraine and the large-scale escalation of the long-standing Israel–Palestine conflict, now backed by Iran. The third reason was economic: the heightened risk of the global economy sliding into a prolonged and deep crisis.

On this wave, central banks began actively purchasing physical gold, and investors flocked into gold-backed ETFs, hedging against a collapse in other asset values. But that collapse didn't materialize — on the contrary, investors sought safe haven in U.S. assets as usual. Against this backdrop, U.S. stock markets surged, and interest rates, previously raised by the Federal Reserve, stabilized. Around the same time, talk began about the need to start cutting rates, which finally happened for the first time in autumn 2024.

Fears of a U.S. recession and a real economic depression in Europe (due to its deep involvement in the standoff with Russia) continued to support gold demand. After Donald Trump took office, the bullish momentum in gold prices continued, driven primarily by heightened uncertainty over the policies of the 47th president. The onset of a trade war strengthened this key supportive factor for gold.

What could happen to gold prices if Beijing and Washington reach a tariff compromise?

I believe gold could undergo a significant correction. However, a more substantial drop — say, back toward $2,000 — is likely to be prevented by ongoing factors such as the war in Ukraine and the risks of a global crisis. If trade talks produce a positive result, gold will likely fall to around $3,000 per troy ounce, where it may find strong support. Given this scenario, I believe any noticeable upward correction should be seen as an opportunity to sell gold.

This image is no longer relevant

This image is no longer relevant

Forecast of the Day:

GOLD

Gold is trading around the $3,300.00 level. Renewed optimism over a potential U.S.-China trade deal could trigger another decline toward $3,200, which may be a suitable level for selling.

#NDX

The contract is gaining support from rising hopes for a U.S.-China trade agreement. If such a scenario unfolds, demand for tech sector stocks is expected to rise, pushing the contract up toward 19,891.60. A potential buy level is 19,382.10.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

XAU/USD. Analysis and Forecast

Today, gold maintains a positive tone; however, bulls are acting cautiously, preferring to refrain from aggressive buying ahead of the release of the important U.S. Non-Farm Payrolls (NFP) report

Irina Yanina 15:30 2025-06-06 UTC+2

WTI. West Texas Intermediate. Traders Await NFP

Prices for West Texas Intermediate (WTI) crude oil remain in the middle of a three-day range. Prices are supported by hopes for the resumption of trade negotiations between the U.S

Irina Yanina 11:23 2025-06-06 UTC+2

ECB Meeting Results and Christine Lagarde's Press Conference

The euro responded with a significant rise following the ECB's decision to cut interest rates. But why did this happen? Let's break it down. The key reason behind the euro's

Jakub Novak 10:54 2025-06-06 UTC+2

What to Pay Attention to on June 6th? Fundamental Event Analysis for Beginners

Analysis of Macroeconomic Reports: A fairly large number of macroeconomic publications are scheduled for Friday, but most of them will not interest traders. For example, the report on industrial production

Paolo Greco 10:11 2025-06-06 UTC+2

Overview for the GBP/USD pair on June 6, 2025

The GBP/USD currency pair continued its upward movement on Thursday, trading overall calmly and without any rush. There was no news for either the British pound or the U.S. dollar

Paolo Greco 05:47 2025-06-06 UTC+2

Overview for EUR/USD on June 6, 2025

The EUR/USD currency pair continued to trade very calmly on Thursday, even when the results of the ECB meeting became known. It should be noted that there was no intrigue

Paolo Greco 05:21 2025-06-06 UTC+2

The EU Economy Will Not Suffer, According to Lagarde

Today, a meeting of the European regulator took place, where the obvious and expected decision was made to lower all three interest rates by another 25 basis points. The decision

Chin Zhao 02:56 2025-06-06 UTC+2

USD/JPY. Analysis and Forecast

During the European session on Thursday, the Japanese yen maintained stability, allowing the USD/JPY pair to hold above the key 143.00 level amid a moderate rise in the U.S. dollar

Irina Yanina 12:04 2025-06-05 UTC+2

AUD/JPY. Analysis and Forecast

Today the AUD/JPY pair is attracting new buyers. Recent Chinese data, including the private Caixin survey, showed a moderate acceleration in growth in China's services sector

Irina Yanina 11:36 2025-06-05 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair continues to decline. Fundamental factors support bearish sentiment, indicating that the path of least resistance for spot prices remains downward. Reports of a trade agreement between

Irina Yanina 11:33 2025-06-05 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.