FX.co ★ Gold Extends Sharp Drop

Gold prices dropped by over 4% on Monday, falling to below $4,350 per ounce, as investors took profits following a series of all-time highs. This decline in demand for the precious metal as a safe haven occurred amidst the emerging signs of progress in peace talks between the United States and Ukraine, even though significant uncertainties remain. President Donald Trump announced that discussions with Ukrainian President Volodymyr Zelenskiy have advanced considerably, though a final agreement may take weeks to materialize. Zelenskiy confirmed that the core framework is mostly established and that US security assurances for Ukraine are resolved, yet crucial issues like the future of the Donbas region remain unresolved. Concurrently, persistent tensions in the Middle East and increasing strains between the US and Venezuela continue to sustain gold’s appeal as a defensive asset. Despite this substantial decrease, gold is still more than 70% higher for the year and is on pace for its largest annual gain since 1979, bolstered by continuous central bank purchases, steady ETF inflows, and the anticipation of further Federal Reserve rate reductions next year.