Gold Price Fall over 3% on Friday, wiping out gains made earlier in the week, trade war sparks big concern for investors as they sold off their gold holdings to cover the losses from a broader market selloff. On-going trade war inflict the fear of global recession, they want to cover the position early.
why trade war affects the gold price?
In reuters, Despite the volatility “gold is still a safe-haven place for many investors,” said Matt Simpson a senior analyst at City Index.
Is Gold = Safe Haven Asset?
When a trade war escalates between countries the economic uncertainty increases, investors get worried about their money they start pulling out or moving away on more safe asset where Gold is FILLING the gap – the safer one.
But why did Gold fall now?
Fact of Gold Price Fall is the twist begins when the gold fall over 3% on Friday, even though it is a safe heaven. Extreme market stress cause it fall sometimes.
What factors led gold to fall over 3%?
Investors need liquidity: they sell gold to cover margin calls (offset losses from broader markets) like stocks or crypto.
The extreme stress in other markets loss creates effect short-term pressure on gold prices, even if the long-term outlook is bullish.
What happened at April 4, 2025?
When market crash broadly, investors sold off the gold bullions to free up cash causing Friday’s sharp decline, even gold has surged to a record high earlier this week.
Stronger dollar makes gold price lower
Trade wars boosting the US dollar in short term because US is seen as relatively stable in economy than other economies. A stronger dollar makes gold more expensive for foreign buyers which is reciprocal in demand.
Recession fear in investors cause gold price fall over 3%
Global economy growth is going slower because on going Trade wars raising fears of recession. If central banks respond with rate cuts, gold tends to benefit longer-term because lower interest rates makes lower opportunity cost of holding gold, gold becomes more attractive as a hedge because of fear and stimulus.
Not just gold other precious metals experienced decline
Silver with 7.3%
Worst week since September for Silver, experienced a decline 7.3% to $29.54 an ounce.
Platinum with 3.6%
Not just Gold Price Fall but Platinum experienced fall over 3.6% to $918.35.
Palladium fell 2%
Decreased 2% to $909.75 with both metals – platinum and palladium make this week the worst because of the losses.
Read also: US Tariffs Hit India Jewellery Exports
What should investors after recent decline?
Analysts says that gold can be subjected to short-term volatility as Gold Price Fall, but it continues to serve as a safe-haven for many investors. Investors should monitor ongoing trade development and broader economic indicators because these are the main factors that will continue to influence market dynamics and the performance of precious metals.
SPDR Gold Shares ETF (GLD) closed at $279.72
As the development reflects on gold price fluctuation (Gold Price Fall) the SPDR Gold Shares ETF closed at $279.72, down to 2.25% from the previous close at $3,167.57 on Thursday. This decline erased the gains from earlier in the week.
