Global Stock Markets Panic Tumble Gold Continues to Face Profit-Taking Selling Pressure

As global equity markets tumbled, gold was caught in the crossfire of conflicting market forces. Rising recession fears typically enhance the attractiveness of gold as a wealth preservation tool, and gold is under selling pressure as panicked investors close out profit-taking positions to cover losses in other areas or to meet margin calls. The short-term outlook for gold remains cautiously bullish, but shocks are expected to intensify.

On August 5, spot gold fell 1.6% to close at US$2,404.53 per ounce under the pressure of huge profit-taking, having lost 3.2% earlier in the session to hit a low of US$2,364.19 per ounce.

The recent panic plunge in global equity markets has created a complex landscape for the price of gold, pitting its traditional safe-haven appeal against the pressure of widespread unwinding. As global stocks tumbled and Japan's Nikkei 225 (Nikkei 225) experienced its worst day since 1987, gold found itself caught in the crossfire of conflicting market forces. An unexpected jump in the US unemployment rate to 4.3 percent in July sent shockwaves through financial markets, fuelling fears of a looming recession. Such economic uncertainty would normally enhance the appeal of gold as a wealth preservation tool.

However, gold price action remains volatile as investors grapple with a rapidly changing economic outlook. Despite its status as a safe-haven asset, gold continues to face selling pressure as panicked investors close out their profit-taking positions to cover losses in other areas or to meet margin calls. This phenomenon highlights the interconnectedness of modern financial markets and challenges the traditional role of gold as a crisis hedge. The short-term outlook for gold remains cautiously bullish, but shocks are expected to intensify. Investors will have to pay close attention to US economic data, Federal Reserve policy signals, global stock market performance, and geopolitical tensions, especially in the Middle East. These factors may determine whether safe-haven demand or liquidation pressures prevail, and thus influence the performance of gold in the coming weeks and months. As markets face greater uncertainty, gold's role as a hedge and source of liquidity will be tested. Its performance is likely to be a barometer of overall market risk appetite and the economic outlook.

Technical level, spot gold on Monday had once fell below the important pivot point of $2400 fell sharply, but the closing stage or was strongly pulled back to the above level above the closing. This shows that the overnight gold of this sharp decline is currently a profit-taking adjustment of the temporary decline, the gold bulls are not yet intended to give way. Overnight gold in the 50-day moving average position by strong support, indicating that the bottom of the plate force is not small. At present, the daily level chart on the technical indicators does not show obvious pointing. It is expected that short-term gold will remain in a limited range to maintain the oscillation finishing trend pattern.The fluctuation range is expected to be in the 2370-2450 U.S. dollars between.