On March 4, despite ongoing geopolitical instability, financial markets saw unexpected movements on Tuesday. While the U.S. dollar and crude oil surged, most global financial products experienced an unexpected sharp decline. Contrary to the traditional belief that gold rises during conflict, both gold and silver—commonly regarded as safe-haven assets—recorded significant drops. Gold fell by $385 in a single day, while silver declined by $13.5.

After early long positions were stopped out yesterday, the outlook quickly shifted to bearish. It was emphasized on Tuesday that if Monday’s low was breached, a sharp decline would follow, providing an opportunity to go short and target further downside. This sharp pullback was primarily driven by market participants chasing liquidity, as investors took profits at high levels and shifted into cash and dollar-denominated assets for safety. This capital rotation exerted downward pressure on gold prices. Technically, once gold fell below the key $5,300 level, it triggered automated stop-loss orders and intensified selling, accelerating the decline. In the short term, the market is expected to enter a phase of consolidation.

Gold is likely to undergo a corrective consolidation today following yesterday’s sharp drop, with further significant declines appearing unlikely. The $5,000 mark, tested yesterday, now serves as strong support, with near-term support around $5,060. Resistance is expected near $5,260. For intraday trading, consider going long above the $5,060 support level and selling near the $5,260 resistance. It is advisable to avoid entering trades in neutral price zones and instead allow the market to develop. During the U.S. session, trading decisions should be based on the day’s momentum—a straightforward and effective approach.