Gold prices have fallen about 6% from their recent record high of $3,500 per ounce as trade war tensions ease.
The market has calmed following President Trump’s April 2 tariff announcements, with Asian economies making progress in trade talks.
Analysts suggest the selloff accelerated as traders recognized the rally had become overextended. Hedge fund managers have reduced their gold positions to the lowest level in 14 months, and options trading patterns indicate an overheated market.
Despite this correction, gold has still gained about 25% this year, supported by ETF inflows, central bank purchases, and speculative demand in China, even as physical consumption in the world’s largest gold market declines.