Gold Prices Dip Below $4,000 Amid Market Shifts

Gold prices tumbled nearly 3% this week as investors booked profits, sparking debate among analysts. While some view the drop as a healthy correction, Chris Vermeulen of The Technical Traders warns of a potential 38% collapse—a scenario that WOULD send shockwaves through commodity markets.

The XAU/USD index weakened further, hitting a daily low of $3,936 with potential to test $3,800. This downturn coincides with revived US-China trade talks, which have temporarily eased geopolitical tensions. Equity markets rallied on the news: Nasdaq surged 432 points, Dow Jones ROSE 337, and S&P 500 gained 83 points—diverting attention from safe-haven assets.

"Gold's luster dims when risk appetite returns," observes Fawad Razaqzada at City Index. "Successful trade negotiations could sustain this downward pressure." The metal now faces its sternest test since the 2023 banking crisis, with traders weighing inflation hedges against resurgent equity opportunities.