Latest Posts

Gold gains but still trades below $1,800 zone

[ad_1]

The yellow metal closed the week with a 1% gain, after a flash crash earlier in the week, that caused the asset class to trade below the $1,700 levels in the Asian session on Monday.

Gold had a rollercoaster ride this week which many see as a comeback. The benchmark gold futures contract declined to $1,677.90 after closing the previous week at $1,763.10, representing a 4.83% decline during the Asian trading, in what has largely been characterized as a “flash-crash.”

Impressively, after Gold crashed to $1,677.90 according to investing.com, the market quickly recovered to end the week at $1,781.55, representing a 6.17% gain from Monday’s bottom.

Although these gains are impressive, after Friday’s close, longs in the market were still short of recapturing the key $1,800 level that is considered a prerequisite for the yellow metal regaining some bullish shine.

Now, investors’ attention are focused on the Jackson Hole gathering in Wyoming. It is an annual retreat for the Fed to examine key strategies for U.S. monetary policy. There is high speculation that this year’s event, scheduled between Aug 26 and 28, will discuss the tapering of the $120 billion in monthly stimulus that the central bank has been providing the economy since the Covid outbreak of March 2020. Speculation about a stimulus taper has heightened since last week’s upbeat U.S. jobs report for July that sent the dollar and U.S. bond yields rallying, which has an opposite effect on gold.

What they are saying

Many analysts acknowledged the rebound but noted that gold was stuck now in a $1,740 – $1,760 range since and said it needed to do more to return to a bullish track.

Craig Erlam, analyst at New York’s OANDA said that “If it can break above here, it would be quite the turnaround but I’m not convinced (that) would be sustainable.” He also said there could be fresh trouble for gold longs as the Federal Reserve’s Jackson Hole symposium neared, stating: “I’d be surprised to see any significant gains ahead of the event.”

Bottomline

Since January, gold has been on a tough ride that began in August last year, when it came off record highs above $2,000 and consolidated for a few months before stumbling into a systemic decline from November when the first breakthroughs in Covid vaccine efficacies were announced.

After initially bottoming out at under $1,675, gold appeared to break its dark spell with a bounce back to $1,905 in May. From there, it saw renewed short-selling that took it back and forth between $1,700 and $1,800 for a while before last week’s move toward $1,650 trading level.

Investors are advised to trade cautiously as the commodities market is very volatile at the moment. In other precious metals, Silver is currently trading at $23.74 an ounce, down 2.25% for the week, platinum is back above the $1,000 trading zone to stand at $1,026.10, up 5.33% for the week and palladium is trading at $2,648.50, up 0.82% for the week.

[ad_2]

Latest Posts

spot_imgspot_img

Don't Miss

Stay in touch

To be updated with all the latest news, offers and special announcements.