Gold plunges from record highs as profit-taking and a firmer US Dollar weigh
Gold (XAU/USD) comes under intense selling pressure on Friday, giving back most of the gains registered earlier this week as extreme volatility triggers broad-based liquidation of leveraged positions. Meanwhile, traders also lock in profits at elevated price levels. At the time of writing, XAU/USD is trading around $5,075, after posting a fresh all-time high near $5,600 on Thursday.
The metal is down more than 6.0% on the day after sliding close to 8% earlier in the European session. The sell-off gathered pace as markets price in a less dovish Federal Reserve (Fed) after reports that former Fed Governor Kevin Warsh is emerging as a leading candidate to succeed Chair Jerome Powell, whose term is set to end in May.
Investors view Warsh as a more hawkish and market-friendly choice than other potential candidates. This has eased fears of aggressive rate cuts under Trump’s pick for the role, despite his repeated calls for lower interest rates.
This, in turn, lifted the US Dollar (USD) and Treasury yields, reinforcing the downside pressure on Bullion. Even so, Gold remains on track for its strongest monthly gain since 1980, up nearly 17%, supported by safe-haven demand amid persistent geopolitical tensions and broader economic uncertainties.
Source: FXstreet.com