secondSince the financial market overcame the climax of the corona crash last summer, gold investors have not had much fun. From a high of US$2063.55 almost a year ago, the price fell below US$1,700.and Inflation concerns The price of precious metals was boosted again, rising to a little over US$1,900. Then prices collapsed again, and then unexpectedly fell by 6% over the weekend. Silver hit it too, and it was a little harder as always. The negative value is 10%.
The reason is the strong data in the US labor market on Friday. This gives investors more reason to believe that sooner or later the Fed will recognize “substantial progress” and regard it as a prerequisite for tightening monetary policy. After the data was released, the yield on the US 10-year Treasury bond rose sharply.
Higher interest rates are for this Gold price Not good, because higher interest-bearing bond yields make interest-free gold less attractive. Especially because despite the high inflation rate and the low bond yields, the demand for gold has not been large recently. Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, now believes that due to the recent death cross pattern, the 50-day moving average fell below the 200-day moving average and the downward trend has intensified. After the labor market data was released, the speed at which investors reduced their gold holdings was impressive.
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Gold and silver were sold at the end of trading on Friday. John Feeney of Guardian Vaults, Bloomberg News Agency’s Australian precious metals warehouse, said that an overhang was observed on Monday morning because some traders who reacted too late may panic when the market opens. The current low liquidity coupled with a large number of triggered stop-loss orders has resulted in opening volatility and abnormally high trading volume.
However, Ozkardeskaya expects that short-term support will be formed in the range of $1,680 to 1,700. After the recent plunge, there will be investors buying gold to hedge against inflation and possible falling stock prices. In fact, the price of gold rebounded sharply by 3% in early trading, as did the price of silver, which rose by as much as 6%. With prices slightly below US$1750 and slightly below US$24, precious metal prices are currently trending sideways and are still a few dollars below Thursday’s level.
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Feeney said it’s too early to comment, but the kind of “surrender” seen now usually coincides with significant market lows. However, the contrary fact is that there is now interest in buying physical metals again.
