Trump Speech Triggers Sharp Short-Term Gold Volatility, Erasing Over $100 Intraday

TradingKey - During the early Asian session on Thursday (April 2), sentiment in the gold market reversed sharply just as U.S. President Donald Trump began his national address regarding the situation in Iran. Previously, driven by a weakening U.S. dollar, spot gold ( XAUUSD) had been rising for the fourth consecutive trading day, hitting an intraday high of $4,800.25 per ounce, marking its highest level since March 20.

However, as Trump stated in his speech that the U.S. armed forces had achieved a swift and decisive victory and that America's core strategic objectives were nearing completion, short-term volatility in gold prices intensified significantly.

Market action showed gold prices quickly retracing from their highs. The market likely interpreted this statement as a signal of cooling geopolitical risks, causing safe-haven buying to subside and sending gold prices diving by more than $100 in the short term.

Logically, the core reason for this sharp pullback in gold is not just Trump's remarks, but rather the market's move to reprice the possibility of the 'conflict ending soon.'

If the U.S. truly secures a victory, upward pressure on oil prices will ease, and inflation expectations will follow suit, potentially reviving market bets on Fed rate cuts later this year. In the short term, however, traders tend to prioritize unwinding accumulated safe-haven positions.

Moving forward, the market will continue to scrutinize the details of Trump's speech and any new response from Iran. Statements regarding the Strait of Hormuz, in particular, will continue to dictate the next direction for crude oil and gold. If expectations of de-escalation continue to rise, gold may face further profit-taking pressure; however, if the situation deteriorates again, safe-haven capital could quickly return.