At 21:11 on Friday night, spot gold suddenly dived, breaking the $1,800, $1,790 barrier and narrowly defending the 1,780 barrier for the first time since July, down more than 1% on the day. At the same time, spot silver is also moving lower, down 4% on the day.
At the same time, intraday gold and silver are also implicated. As of writing, the main contract of Shanghai silver fell more than 3% on the day.
Today is the day after Thanksgiving, the gold market trading is quite quiet, gold day trading is restricted, at this time there was a huge amount of orders, COMEX most active gold futures contract at 21:10 Beijing time within one minute turnover of 2517 hands, the total value of the transaction contract over $ 450 million.
In fact, gold ETFs have also seen large outflows recently. Some investors seem to be abandoning gold. Gold ETFs are expected to see their first month of outflows this year after their holdings surged to record levels in October.
Fundamentally, several analysts have pointed out that the selling was triggered directly by a cooling of risk aversion, as progress in the development of the new coronary vaccine boosted risk sentiment. Gold prices are likely to fall for the fourth consecutive month, with CNBC stating that this week could be the worst week for the gold market in 2 months.
Michael Hewson, chief market analyst at CMC Markets, noted that gold’s fall below $1,800 per ounce is likely to lead to a further decline to $1,760 per ounce, as the market theme around vaccine optimism is likely to continue to put further pressure on gold as a safe-haven asset.
Independent analyst Norman also points out that for now, gold remains skewed to the downside in the short term. But in the long term, the outlook for gold prices going forward is not too good, given ultra-low interest rates and the prospect of more stimulus measures in the economy.
Technically, FxStreet analysts have pointed out that the gold price will move down to 1796 and even to the pivot point of $1789 after breaking below the 1800 mark (psychological mark/200-day moving average), which has already been confirmed. The next technical support level is at $1750, which could be tested if spot silver fails to close above $1800.
However, on the daily chart, the relative strength index RSI fell below 30 for the first time in 2020, suggesting that a technical rebound could be seen before more declines occur.
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