(News Bulletin 247) – The precious metal, supposed to represent a shelter for investors, lost almost 5% in a few sessions. A decline which seems above all to be explained by liquidations on the part of investors to cover their losses on other markets.

Even gold cannot win every time. The precious metal has suffered in recent days. From Thursday to Monday, the raw material fell by almost 5% in the space of three sessions, in the wake of the announcements of Donald Trump on American customs surcharges.

The Once d’Or was even ironed on Monday under the symbolic threshold of 3,000 dollars. This Tuesday, its course finds colors and earns 0.9% at 3.008.47 dollars perce.

These measures, which will fully enter into force on Wednesday, caused retaliatory measures from China, leading investors to fear a real trade war. Consequently, the equity markets have unscrewed. The CAC 40 lost almost 12% in three sessions.

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A paradoxical drop

This context of uncertainty of trade tensions is supposed to be conducive to gold, an asset renowned for being the refuge value par excellence. For more than a year now, precious metal has demonstrated its ability to progress in almost all circumstances, chaining records.

In addition, bond yields have generally decreased these last sessions, which is supposed to provide technical support to gold. Unlike actions (with dividends) and obligations (with coupons), gold does not produce income. Its course is therefore helped by a decrease in interest rates, because it then becomes more and more interesting to invest your money in gold rather than placing it.

But nothing has done, gold has suffered. “The current market environment reflects a feeling of reduction in risk, investors seeking to minimize exposure to volatile assets in a context of climbing trade tensions and fears of recession,” recalls Naeem Aslam of Zaye Capital. “This has led to a paradoxical situation where, despite the traditional role of gold as a refuge, its price has dropped due to the general market dynamics,” added the specialist.

Margins

More specifically, it seems that gold has suffered simple technical decisions. “This drop is largely due to the fact that portfolio managers have been forced to liquidate their gold positions to respond to margin calls on their position positions,” said Ricardo Evangelista of Activtrades.

To simplify, “margins” occur in certain markets, when a financial intermediary, such as a broker, asks an investor to provide funds to cover a losing position. Magnium calls are thus alert signals which arrive in particular in the event of brutal movements on the markets. Which has been the case in recent days.

“We think” that the movement of decrease on gold “probably reflects, on the one hand, the liquidation of long positions (buyer, editor’s note) on gold to cover margin calls on shares following the generalized sale of stock markets and, on the other hand, the potential rotation of gold investors towards alternative assets now that the initial uncertainty linked to reciprocal rates is Resolved “, abounds Goldman Sachs.

“Consequently, this sale (gold, editor’s note) seems to be more motivated by technical and sentimental factors than fundamental. The main factors that supported gold remain unchanged,” concludes Daniela Sabin Hathorn from Capital.com.

The latter cites, for example, the continuous demand for central banks for gold, in particular central banks of emerging countries, or “continuous concerns concerning global growth”.

“The remaining uncertainty of the dominant theme of the financial markets and the political options of the federal reserve being increasingly limited, the precious metal could have an additional potential”, judges Ricardo Evangelista.

Recall that many design offices are optimistic about the evolution of gold prices. Goldman Sachs estimates that the ounce should reach 3.300 dollars by the end of the year, in an interval from 3,250 dollars to 3.520 dollars per ounce.

The American bank judges that the recent withdrawal of gold prices constitutes an opportunity to purchase, in particular due to the anticipations of rate reductions on the share of the American federal reserve and fears of recession.

UBS for its part has a target at 3.200 dollars an ounce for 2025. The Swiss bank judges however that gold could reach 3.500 dollars if the commercial and geopolitical risks worsen.