Gold Hits Pause After Soaring to Record Heights - Prime Project Fund

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Gold Hits Pause After Soaring to Record Heights

Gold Hits Pause After Soaring to Record Heights

2026-03-28 15:02:17

Gold Hits Pause After Soaring to Record Heights

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The price of gold has tumbled sharply over the past few days, bringing a sudden pause to its recent record-breaking surge.

Gold dropped more than nine percent on Friday, marking its steepest single-day decline since 1983, and fell another six percent on Monday.

This follows last month’s peak when the yellow metal reached an all-time high of five thousand five hundred dollars an ounce, capping a year of dramatic gains.

Even with these declines, gold has only returned to levels seen a few weeks ago and remains around seventy percent higher than at the same time last year.

So what caused this sudden drop

Analysts point to the nomination of Kevin Warsh by US President Donald Trump to lead the Federal Reserve as a key factor. Warsh is seen as a very acceptable choice by markets, easing recent concerns about the Fed’s independence. This strengthened the dollar and calmed investor nerves, which in turn reduced demand for gold, typically a safe haven in uncertain times.

Changes to trading rules on a major exchange also made it more costly for speculators, further pressuring prices.

Gold and silver have climbed sharply since the start of the year and some experts believe the recent rise had gone too far. Mark Matthews of Bank Julius Baer explained that the drop was partly because prices had already surged dramatically the previous week and profit-taking triggered a snowball effect.

Despite the sharp falls, some analysts see this as a temporary blip. Michael Hsueh at Deutsche Bank said conditions do not suggest a sustained reversal and the bank still expects gold to reach six thousand dollars an ounce.

Why had gold been climbing

Gold has been gradually rising over several years, but last year saw its biggest annual gain since 1979. The metal is viewed as the ultimate safe haven, offering a secure store of value when uncertainty rises.

Nicholas Frappell of ABC Refinery described gold as a strong diversifier, noting it is not tied to someone else’s debt or company performance.

Investor anxiety last year centred on the unpredictability of US trade policies. Tariffs announced in April and threats of new tariffs against European countries kept markets on edge, pushing gold and silver to record highs.

Ongoing concerns over trade policy continue to support gold, according to Emma Wall of Hargreaves Lansdown.

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