Investors are seeing relatively less risk from the US–Iran situation, at least for now. This had a strong impact on gold, which collapsed to $1,550. Indeed, this sharp decline reflects a reconsideration of the risk coming from the geopolitical situation. It is not unusual that after an initial impulsive rally, the price slows down when investors are able to better weigh the real risk.
From a technical point of view, the bullion price is now challenging the key support level of $1,550, continuing the decline started yesterday. It will be a positive signal if prices can halt their fall on this level, otherwise – at least in the short term – gold could lose momentum, despite the main trend (long term) remaining strongly bullish.
