Home Daily Analysis Charts / Trade Ideas Dramatic Drop In Gold – Who’s Behind It and What Next?

Dramatic Drop In Gold – Who’s Behind It and What Next?


Gold traded sideways throughout the Asian and the London session as escalating trade tension between the U.S. and China kept it supported.
It fell around 0.1% at $1,282.45 per ounce during the Asian trading.

However, just a few minutes back, there has been a sharp drop in Gold from 1,283 level to 1,277. Honestly, I couldn’t find any headline behind the quick drop in gold prices, but it comes as U.S. traders return from a long weekend.

The trading activities in markets are calm so that may have taken some of the premia out of Gold, but I presume this is actually about flows. There had been countless chatter about Venezuela business, and that could be the driver.

The U.S. dollar DXY, +0.20% ticked higher on Tuesday. The ten years Treasury Bonds, -1.59% yield retreated to its lowest since Oct. 2017. A firmer greenback can hurt Gold and other commodities priced in dollars. So this can be one of the reasons behind such a sell-off.

On the technical front, it’s another failed bounce for Gold but there is plenty of support from $1270-$1262, so I don’t envision any more in-depth breakdown.


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