Gold is maintaining its strength after a sharp fall from its record high. After "buy the dip" buyers stepped in during the price drop, selling pressure began to ease and gold's movement stabilized.
In early trading, gold bullion was around $4,950 per ounce after surging more than 6% in the previous session. The boost came from a return to risk on market sentiment and a weakening US dollar. Silver also tended to be subdued.
Despite this, gold remains about 12% below its record high set on January 29, but is still up nearly 15% year to date. This signals that the rally may have been interrupted, but buying interest has not completely disappeared.
According to Daniel Ghali of TD Securities, the wave of forced selling in precious metals may have reached its end. However, the extreme volatility of the past week could cause retail investors to hold back meaning that one major source of demand has temporarily "disappeared" from the market.
The background is that last month's precious metals rally was fueled by a combination of speculative pressure, geopolitical tensions, and concerns about the Federal Reserve's independence. But the rally abruptly stalled late last week: silver posted its biggest daily drop, while gold suffered its deepest decline since 2013 following numerous warnings that the gains were "overdone" and too rapid.
Looking ahead, Bank of America believes precious metals volatility will remain high, although several banks believe gold can recover. Deutsche Bank even maintained its projection for gold to reach $6,000/ounce. As of the latest update, gold was nearly flat at $4,944.66/ounce (7:49 a.m. in Singapore), silver fell 0.8% to $84.48, while the Bloomberg Dollar Spot Index was relatively flat. (asd)[sma]
Source : Newsmaker.id
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