Gold Holds Above $4,360 After Sharp Sell-Off Driven by Profit-Taking

London | EcoPulse24

Gold prices stabilized above $4,360 per ounce during Tuesday trading after the precious metal suffered a sharp sell-off in the previous session, losing over 4% of its value due to widespread profit-taking following record highs. Monday's decline marked the largest daily drop for gold since October and the second biggest one-day fall this year, prompting caution in the markets before prices returned to relative stability as safe-haven demand held firm.

Despite the strong correction, gold's status as a safe haven remains intact amid persistent geopolitical uncertainty. New developments have cast doubt on peace talks between Russia and Ukraine, following reports that Russian President Vladimir Putin informed U.S. President Donald Trump that Moscow would reassess its negotiating stance after alleged Ukrainian strikes targeting his residence.

Concurrently, Trump escalated his rhetoric against Iran, warning of further strikes if nuclear program rebuilding activities continued. He also announced that the U.S. targeted an oil loading facility in Venezuela, heightening geopolitical risks and boosting demand for defensive assets.

Despite recent volatility, gold is on track for its largest annual gain since 1979, supported by strong central bank demand, continued inflows into gold-backed ETFs, and expectations of further U.S. interest rate cuts. Analysts note that recent moves reflect a healthy technical correction following an extended rally, and maintain that the medium-term outlook for gold remains supported by a combination of geopolitical risks and globally accommodative monetary policies.