Gold has plunged more than one percent on Wednesday, hitting its lowest level since March 30 as the US dollar stages a recovery and risk sentiment turns neutral. The precious metal dropped to $3,443 amid renewed concerns that negotiations between the United States and Iran could stall, reviving safe-haven demand for the greenback rather than gold.
The sharp reversal comes as traders reassess Middle East geopolitical risks, with doubts emerging about a potential diplomatic breakthrough. The strengthening dollar is making gold more expensive for foreign buyers, pressuring the yellow metal lower after recent gains. The shift away from gold suggests markets are rotating back into dollar-denominated assets as uncertainty over the Iran deal timeline increases.
Traders holding long gold positions face immediate pressure while forex participants are closely monitoring USD strength across major pairs. The two-month low represents a significant technical breakdown for gold bulls who had positioned for continued upside.
FXnCO Insight
Watch for further gold weakness if US-Iran talks deteriorate, while dollar strength may accelerate if diplomatic uncertainty persists through the week.
Source: FXStreet