The precious metal is falling sharply after a rally lasting several weeks that had led the price to break several records.
Gold collapses more than 6.3%in which is your biggest drop in 12 yearsafter a multi-week rally that had led him to score a historical record of US$4,381.52 per ounce last Monday.
This Tuesday, the price of the main precious metal it yielded to the US$4,160 zone, affected by the optimism of trade negotiations between the US and Chinaas well as for the appreciation of the dollar and investor uncertainty regarding the US government shutdown.
In recent days, the price of gold had risen on expectations of interest rate cuts by the Federal Reserve (Fed) and the sustained demand for refuge, as reported by Reuters. So far this year, These factors and geopolitical uncertainty boosted its price by 60%.
“Just yesterday they were buying gold in declines, but The sharp jump in volatility at the highs during the last week is a sign of caution and may encourage, at least, short-term profit-taking“, said Tai Wongan independent metals trader, told Reuters.
gold.
In that sense, Jim Wyckoffsenior analyst at Kitco Metals, told that medium: “better risk appetite in the broader market earlier this week is bearish for safe-haven metals”. Gold is a non-yielding asset and tends to benefit in a low interest rate environment.
Silver fell below $49 an ounce
For its part, Spot silver fell 6.8% to $48.89 an ounce. “Silver is falling dramatically today and it has dragged the entire complex down,” Wong said.
“It looks like we have a short-term high at $54 and while sentiment teeters below $50, Silver is likely to trade sideways with substantial volatility while gold remains relatively firm“.
Besides, Platinum fell 5.4% to US$1,550.10 and palladium lost 5.1% to US$1,425.19awaiting the publication of the US consumer price index report for September, delayed to Friday due to the US government shutdown.
It is expected to show a year-on-year increase of 3.1%. Markets expect the Fed to cut interest rates by 25 basis points at its policy meeting next week.
Source: Ambito
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