Last night, the U.S. session was extremely difficult for gold as it faced a strong sell-off, pushing the price down to the $5,053/ounce area — nearly $150 lower from the intraday high.
Although geopolitical tensions in the Middle East remain intense and continue to escalate, the impact of the conflict on the stock market has forced many investors and funds to sell part of their gold holdings in order to raise cash and maintain positions in equities and other risk assets.
As a result, capital inflows into gold have decreased. This is one of the main reasons why gold prices in recent days have shown signs of weakening and moving sideways within a very wide range of more than $140, even as oil prices continue to surge sharply.
In the short term, gold prices are likely to maintain this wide-ranging sideways movement at least until stock markets and other risk assets become more stable, allowing capital to flow back into gold.
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