Gold fell sharply in a broad, risk-off move driven by a combination of profit- taking after a recent rally, a stronger dollar, and shifting expectations around interest-rate policy in the United States. Traders also cited softer near-term demand for safe-haven assets and technical signals indicating overbought conditions after a rapid run higher. In short, both macro dynamics and market psychology contributed to the drop. Key factors likely behind the move

• Profit-taking after a recent rally: When an asset has surged for several sessions, traders may trim positions to lock in gains, amplifying a one-day decline.

• Strengthening U.S. dollar: A firmer dollar makes dollar-priced gold more expensive for buyers using other currencies, reducing demand and pressuring price.

• Interest-rate expectations: When the market prices in fewer or delayed rate cuts, gold’s appeal as a hedge against policy risk can wane, contributing to softer prices in the near term.

• Shifts in risk sentiment: Improved appetite for risk can dampen safe-haven demand for gold, helping push prices lower during bouts of strength in equities or other assets.

What to watch going forward

• Dollar moves: If the dollar weakens, gold may recover; if the dollar strengthens further, gold could remain under pressure.

• U.S. rate path: Any clearer signal about rate cuts or the path of the Fed’s policy could shift gold’s trajectory in the short term.

• Technical levels: Breaks or holds at key moving averages (e.g., 50-day and 200-day) can influence short-term direction and trader sentiment.

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