XAU/USD: Gold Sells Off as Risk Appetite Hits Fever Pitch — Stocks Soar to Record Highs

It’s wild out there for a Friday — gold was off by 2% to languish near a one-month low while the cash flows were apparently heading into record-breaking US stocks.

🦁 Risk Appetite Roars Back

• Gold prices XAUUSD were falling off a cliff on Friday as traders and investors were busy jamming their cash into risk assets — stocks, mostly. The price of bullion slipped to a one-month low of $3,255 per ounce, down more than 2% at its session low.
• The pivot away from safe havens comes at a time when global tensions are cooling on all fronts — war jitters are toning down, tariffs have plateaued and are still in the grace period before they’re brought up again as a topic.
• Against this backdrop, the shiny metal is on track to end the week in the red by nearly 3% — its second straight weekly decline (that is, while the US dollar is also on the losing end in forex deals).

💧 Cash Floods into Stocks

• The S&P 500 and the Nasdaq Composite both surged to fresh record highs Friday, driven by a brightened outlook on rate cuts and easing geopolitical tension in the Middle East. Investors viewed this as a green light to jump back into equities.
• That risk-on rotation hit defensive assets hard: Treasuries slid, gold dropped, and even the Japanese yen softened as capital sought higher yields.
• Another key driver for investors to bet on a possible Fed rate cut as soon as July or September arrived earlier today when the PCE report was released. The Fed’s preferred inflation gauge showed prices rose 2.7% in May from last year, a notch higher than the 2.6% expected.

🌍 Calmer Global Outlook

• “Good enough,” investors, maybe, when they scooped up equities and sold off the precious metal. War concerns between Israel and Iran appear to have de-escalated, with ceasefires holding and no fresh major headlines to rattle markets. Meanwhile, tariff drama — though lingering in the background — is not yet back on the front page.
• That calmer geopolitical backdrop is dulling the shine on gold’s safe-haven appeal. Traders seem less interested in holding hedges and more focused on chasing yield.
• Still, gold remains a major megacap winner, outshining the S&P 500 this year with a majestic 26% rise. The broad-based index, in comparison, is up a mere 5% (but 24% higher from its April nadir).