Gold Plunges More Than $300 Again, Will It Continue to Fall?

TradingKey - Driven by the Federal Reserve's hawkish stance, a strengthening US dollar, and renewed inflation expectations spurred by Middle East tensions, gold prices plummeted for two consecutive trading sessions, with a cumulative drop of over $500. During intraday trading yesterday (March 19), gold prices dipped to $4,502.69, nearly touching the widely-watched $4,500 psychological barrier; while prices subsequently stabilized, the market remains in a clear correction phase.

Source: TradingView

Technically, this resembles concentrated profit-taking following a period of strong gains rather than a flash crash triggered by a single event. Gold had previously been hitting successive highs before rapidly breaking below several key support levels, weighed down by the repricing of interest rate expectations, a rebounding dollar, and rising Treasury yields.

The market's pricing logic for gold is also shifting: it retains its safe-haven appeal while increasingly acting as an asset highly sensitive to interest rates. As long as the Fed avoids clear easing signals and geopolitical conflicts continue to push energy prices higher, gold is likely to remain caught in a tug-of-war between 'safe-haven buying' and 'high interest rate pressure,' keeping short-term volatility elevated.

The current focus is whether the $4,500 level can hold. If this area is repeatedly breached, the correction may continue, potentially testing key support at $4,400. Should dip-buying re-emerge, gold prices may transition from a post-plunge recovery toward gradual range-bound consolidation.