Gold Slides as Calm Grows Near the Russia‑Ukraine Standoff
Gold’s latest dip comes on a backdrop of rising optimism about a potential ceasefire between Russia and Ukraine. The buzz around a possible pause in fighting has nudged investors toward risk‑free hulls—clearing the way for the metal to ease off.
What’s Behind the Drop?
When US President Donald Trump proclaimed that both sides will now “immediately” start talks, market sentiment flipped. A surge of confidence in conditions that look safe means people are less eager to put their money in a precious metal’s cold vault.
ETF Outflows Are in the Spotlight
Gold‑backed ETFs have been pulling the rug, pulling out a net 30 tonnes last week. That’s the biggest outflow since September 2022. It’s a signal that some institutional players may be pulling away, and that could keep the metal under pressure for the near future.
Fed Policy Keeps the Gold on the Braces
- Fed markets expect at least two rate cuts in 2025 after weaker‑than‑expected inflation and retail sales.
- A recent hawkish side‑wink from Fed officials, however, tempers the timeline and scale of easing.
- Because gold doesn’t pay a dividend, a cautious approach from central banks usually hands the metal a tighter ceiling on upside potential.
Middle‑East Tensions Provide a Backup Plan
While the Euro‑Atlantic scene settles, tensions in the Middle East persist. Those geopolitical tremors still have the potential to swing investors back to gold as a safety net.
What to Watch in the Coming Weeks
Investor eyes will be on a suite of events that could swing gold’s short‑term romance: Fed speeches, upcoming US economic data—including S&P Global’s preliminary Purchasing Managers’ Indexes—and any progress in geopolitical negotiations.
Those headlines will help shape whether the metal can reclaim some of its ground or continue the slide.
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