The bullion market has stabilized after recording three consecutive days of sharp declines, following a correction since last Thursday from a high of nearly $5,600 to around $4,400.
At 8.50 am, the price of gold was at $4,801, up 3.05% from Tuesday's early opening price in the Asian session.
The precious metal recorded its biggest intraday drop in decades on Friday, when the price fell by up to 10.7% in daily trading.
The sharp drop was driven by high market volatility and thin liquidity, thus triggering forced liquidations and massive profit-taking activities at record levels.
Selling pressure also increased as market sentiment shifted towards expectations of more aggressive monetary policy, after US President Donald Trump nominated former Federal Reserve (Fed) Governor Kevin Warsh as the new Fed Chairman.
Despite the sharp correction, gold’s medium to long-term bullish trend remains intact.
The macroeconomic backdrop remains supportive, with ongoing geopolitical risks and global economic uncertainty continuing to be the main drivers of demand for safe-haven assets.
At the same time, strong institutional buying and investment flows remain the main supporting factors for price movements.
Heading into the week, market attention is focused on the US labor market data series that are expected to influence near-term price movements, with the main focus on the Non-Farm Payrolls (NFP) report due out on Friday.
