“Gold’s glorious charge finally met gravity. After months of one-way conviction and relentless inflows, the metal took a 6 per cent cliff dive,” said Stephen Innes at SPI Asset Management.
“Volatility in gold has now surpassed equities, echoing the pandemic’s manic heartbeat,” he said.
However, he added that the commodity would likely still retain support among investors.
“Beneath the surface, the structural demand for insurance remains.
“Central banks will keep stacking reserves, investors still question the durability of fiat promises, and the monetary plumbing remains swollen with debt and distortion.”
Charu Chanana of Saxo Markets added: “None of this means the precious metals story is over. In fact, these are healthy developments, helping to cool what had become an overheated trade and preventing the rallies from turning into a bubble.”
The selling matched losses in equities, with most Asian markets falling following two days of strong gains.
While investors were taking a breather from the latest run-up – fanned by hopes for a thawing of relations between Beijing and Washington as well as rate-cut bets – comments from Trump raised eyebrows.
The US president said Tuesday he expected to seal a “good” trade deal with Xi at the APEC summit in South Korea next week, saying that “I think we’re going to have a very successful meeting. Certainly, there are a lot of people that are waiting for it”.
But he then added: “Maybe it won’t happen. Things can happen where, for instance, maybe somebody will say, ‘I don’t want to meet. It’s too nasty.’ But it’s really not nasty.”
Hong Kong and Shanghai dropped along with Sydney, Wellington, Taipei and Manila, though Singapore, Seoul and Jakarta rose.
Tokyo ended flat, eroding early losses fuelled by profit-taking after a strong rally sparked by an end to political turmoil in Japan.
London opened on the front foot but Paris and Frankfurt edged down.
Oil prices jumped around 2 per cent on speculation that India will agree to cut its purchases of the commodity from Russia as part of a trade deal with the US.
Trump claims New Delhi has pledged to reduce its imports from Russia, which Washington says helps finance Moscow’s war in Ukraine.
Indian officials have neither confirmed nor denied any policy shift.
India is one of the world’s largest crude importers and relies on foreign suppliers for more than 85 per cent of its oil needs. It began buying heavily discounted Russian crude in 2022, taking advantage of Western sanctions that limited Moscow’s export options.
Source: CNA
