Gold prices plummeted on Friday, and it's not just because of the Russia-Ukraine situation

After rising for seven consecutive weeks and reaching a historical high, gold prices suffered a sharp decline on Friday, marking the largest single-day drop since the current uptrend began.

Behind this sudden change, there are not only disturbances from the evolving situation between Russia and Ukraine, but the market is also weighing the uncertainties surrounding U.S. President Trump's tariff measures and the Federal Reserve's interest rate cut cycle.

On Friday, gold prices fell significantly, with COMEX gold futures down 1.76% to $2,893.70 per ounce, and spot gold closing down 1.56% at $2,882.53 per ounce, marking the largest single-day drop since December of last year, although it still accumulated gains for the week.

Data released on Friday showed that as of the week ending February 11, fund managers reduced their bullish bets on gold to a four-week low.

Media analysis pointed out that more and more people speculate that Trump's threatened new tariffs are mainly used as a negotiation tool, as he previously ordered reciprocal tariffs on various countries, a process that may take some time to complete.

Wall Street Journal previously mentioned that tariff concerns once pushed the gold market's position levels to the 91st percentile since 2014, consistent with Goldman Sachs' estimate that tariff hedging could drive gold prices up by 7%.

Goldman Sachs' commodity research team stated that if tariff uncertainties dissipate and market positions return to normal, gold prices may experience a moderate tactical pullback.

This week, market expectations for the Federal Reserve's interest rate cuts also fluctuated. On Wednesday, U.S. inflation data was explosive, further dampening market expectations for the Fed to cut rates this year. However, the release of January's U.S. retail sales data on Friday, which recorded the largest drop in nearly two years, reignited bets on the Fed cutting rates this year.

From a technical perspective, gold prices also need a correction. So far, gold has reversed at the upper part of the upward channel trend, and it may pull back to the 21-day moving average ($2,812). The 50-day moving average remains much lower, currently at $2,717, slightly above the lower point of the trend channel.

Regarding the significant drop in gold prices on Friday, Goldman Sachs' Rick Privorotsky posed an interesting question: "If the gold bull market began with the freezing of Russian assets by the U.S.... then if Russian assets are unfrozen, will that end the gold bull market?"

His conclusion is that central banks will continue to buy gold, as the precedent has been set.