World's largest gold ETF stalls as gold prices slide on Trump's remarks over US-Iran tensions

On April 2, world gold prices showed extreme volatility, at one point falling nearly $200/oz to $4,553/oz. Buying support then returned, helping prices recover to around $4,676/oz.

Geopolitical shock drives the sell-off

The main factor behind the drop was strong remarks from Donald Trump regarding the US-Iran conflict. He said tensions could last another 2-3 weeks and left open the possibility of additional military strikes. The comments dashed market expectations for a near-term de-escalation in geopolitics, prompting investors to shift sentiment quickly.

Spillover effects: oil, inflation expectations and the dollar

The move also pushed oil higher. WTI futures in New York rose over 11%, while Brent in London was up nearly 8%. Higher energy prices increased concerns about inflation, reinforcing expectations that central banks may keep policy rates higher for longer—typically negative for gold because the metal does not yield interest.

Gold also faced pressure from a firmer US dollar. The Dollar Index rose 0.37% to 100.02 by the close, adding to downward pressure on gold and other precious metals.

ETF flows: SPDR Gold Trust pauses

Data from Muavangbac.vn showed that the world’s largest gold ETF, SPDR Gold Trust, temporarily stood pat. It ended a two-session run of net buying and held holdings at 1,050 tonnes.

Technical outlook and key price levels

Avi Gilburt, founder of ElliottWaveTrader, outlined two technical scenarios. The first is that gold may fail to break above current resistance and could turn lower. The second, riskier scenario is that if prices break above $4,800/oz, gold could continue rising toward $5,200/oz before entering a deeper correction.

Under Gilburt’s forecast, gold could fall below $4,000/oz, potentially around $3,800/oz—about a 20% correction from current levels. He also cautioned that a rapid rally followed by a sharp drop could cause investors to believe the correction has ended, when the market may be starting a larger down cycle.

What to watch next

Overall, the near-term direction for gold is expected to depend heavily on market reactions around key resistance levels, with the risk of a deeper correction remaining in focus.