Expectations for further gold gains ease as rally slows down

Bloomberg reports that gold has risen at a faster pace than other asset classes. The yellow metal rally has been driven by investors' desire to reduce risks related to US President Donald Trump's tariff policy. However, at the moment, some market observers point out the need to be cautious when investing in this metal, the news agency says.

Gold prices have lost about 6% from last week's intraday peaks on signs that trade tensions may be easing. At the same time, hedge fund managers have cut their net long positions on the yellow metal to the lowest level in over a year, Bloomberg reports. 

Barclays strategists believe asset price growth is outpacing the fundamentals. This has already brought significant speculation. After Trump's announcement of reciprocal tariffs, demand for gold-backed exchange-traded funds surged, leading to a shift in the metal's price dynamics.

Barclays expects gold prices to slide at least in the short term. According to the company's strategists, the asset is dislocated relative to its fundamental drivers—the US dollar and real interest rates.