Precious metal markets witnessed intense selling operations on Tuesday.
Spot gold fell by a significant 6.3% to $4,082.03 per ounce.
Silver also declined by 8.7% to $47.89 per ounce, marking its biggest loss since February 2021.
Why did prices fall?
According to Bloomberg News, several factors converged to cause this decline, including: improvement in US-China trade talks, dollar strength, saturation of technical indicators after a period of continuous ascent, the end of the buying season in India, and the absence of speculation positions data due to the US government shutdown.
Demand for gold and silver decreased in conjunction with the upcoming meeting between US President Donald Trump and his Chinese counterpart Xi Jinping next week, and as gold prices entered the “overbought” zone according to relative strength indicators.
“In recent sessions, traders began to worry about a price correction… Underlying demand is likely to remain supportive and limit any significant pullback,” Ole Hansen, a commodity strategist at Saxo Bank, told Bloomberg News.
It is worth mentioning that the decline in silver came after significant gains of nearly 80% since the beginning of the year, driven by the same factors mentioned, in addition to the supply shortage in the London market and a decline in inventories in Shanghai and New York. Although index funds have not yet reached their historical peak, Bloomberg warns that the momentum does not last long and that any strong US data may lead to further decline. (Sky News)
source: 961 today
