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Gold Enters $1,700 Lows In 3rd Losing Week, Amid Risk-On Rampage

CommoditiesNov 27, 2020 01:48PM ET
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© Reuters.

By Barani Krishnan

Investing.com - Run, gold bull, run — away from the bear that is.

The selloff in what is arguably the world’s most cherished, albeit vaunted, metal showed little signs of slowing on Friday as it fell to $1,700 territory — its foray there since June.

“Gold is really struggling to pick itself up and dust itself off after taking quite a beating in recent weeks,” said Craig Erlam, analyst at New York’s OANDA. “Gold looks vulnerable to another tumble, (as) the path of least resistance still looks to be below.”

It’s been a miserable time for anyone who’s been bullish or long gold as the yellow metal posted its third straight weekly loss, while heading for a fourth monthly drop in a row since July. While gold tanked on signs that upcoming vaccines will greatly help curb the Covid-19 pandemic in coming months, stocks and risk assets like oil have rallied instead. 

In Friday’s trade, the spot price of gold, which reflects real-time trades in bullion, was down $21.55, or about 1.2%, at $1,787.55 by 1:00 PM ET (18:00 GMT).  Bullion earlier fell to $1,774, a level not seen since July 7.

Gold futures for December delivery on New York’s Comex settled the day’s trade down $23.60, or 1.3% at $1,1781.90. It earlier hit $1,770.65, a low not seen since June 22, when it sunk to an intraday bottom of $1,769.

For the week, the benchmark U.S. gold futures contract lost 4.8% — almost matching the dive from two months ago when outgoing U.S. president, Donald Trump, announced he wasn’t interested in pursuing a second fiscal stimulus package for the Covid-19. It was the first U.S. stimulus of around $3 trillion or more, issued in March, that helped gold futures hit a record high of almost $2,090 in early August.

While Trump has wavered several times on the second stimulus, his loss of the November 3 U.S. election has now made him a lame-duck leader, ushering in hope that President-Elect Joe Biden will be able to get a second fiscal package together when he’s sworn in on Jan. 20. That helped gold bulls to stay somewhat positive despite booking continued losses.

But news of Covid-19 vaccine development efforts over the past three weeks have also dealt a huge blow to those long the precious metal, as money continued to leave the safe haven for risk-on assets such as stocks and oil. Friday’s settlement in December gold, for instance, was some $300 an ounce below its August record high.

Chartists said the metal could have more to lose, based on its downside trajectory.

“On the way south next areas of interest are $1,760, the 50% Fibonacci Retracement of the March – July rally and $1,700 (June 15 lows),” chartist Guillermo Alcala said in a blog on FX Live.

Gold Enters $1,700 Lows In 3rd Losing Week, Amid Risk-On Rampage
 

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Comments (18)
Alan Rice
Alan Rice Nov 29, 2020 3:13PM ET
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Au: Brent bbl = 40+ !! (WHOA!!)
Alan Rice
Alan Rice Nov 29, 2020 3:13PM ET
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Should be < 10.
Niheet Jain
Niheet Jain Nov 28, 2020 2:28AM ET
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what is future of gold in next 2 months ?? can you answer please !!
rajkumar kohli
rajkumar kohli Nov 28, 2020 2:28AM ET
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I think gold is in bearish trend.. if it breaks 1760 in international mkt. it will breaks down further. gold is in selling range and sell on every rise.
SHREE PARSHVA INVESTMENT
SHREE PARSHVA INVESTMENT Nov 28, 2020 2:28AM ET
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@44800
Alan Rice
Alan Rice Nov 28, 2020 2:28AM ET
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See a Certified Investment Advisor.
Bala Narasa Reddy
Bala Narasa Reddy Nov 27, 2020 11:13PM ET
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What do you think is the future of gold in short term 4 weeks?
rajkumar kohli
rajkumar kohli Nov 27, 2020 11:13PM ET
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I think gold is in bearish trend.. if it breaks 1760 in international mkt. it will breaks down further. gold is in selling range and sell on every rise.
Tyrell Banks
Tyrell Banks Nov 27, 2020 2:49PM ET
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Does gold & silver move while market is closed? Im stuck in sell... thanks
Barani Krishnan
Barani Krishnan Nov 27, 2020 2:49PM ET
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Yes, in futures trade. From 6pm Eastern Sunday, ahead of Monday's regular market.
Barani Krishnan
Barani Krishnan Nov 27, 2020 2:49PM ET
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Today (Friday) will be until 5 pm Eastern.
Cryoman Frozen
Cryoman Frozen Nov 27, 2020 12:45PM ET
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maybe by the end of 2026 gold will be at $2000
Fabio falec
falec Nov 27, 2020 12:45PM ET
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Thanks god we have stocks that are well valued
Jan Buyle
Jan Buyle Nov 27, 2020 12:03PM ET
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It's not hard to push gold down on a no volume day like today. Monday will go back up over 1800 within 2 hours. Wanna bet?
Michael Song
Michael Song Nov 27, 2020 12:03PM ET
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you are right Jan...I agree..jp Morgan pushes it down daily with spoofing and other ways...especially in these kinds of days it works perfectly well..
Tadas Pikčiūnas
Tadas Pikčiūnas Nov 27, 2020 12:03PM ET
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And JP Morgan loves spoofing.... very much.
Tyrell Banks
Tyrell Banks Nov 27, 2020 12:03PM ET
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Does it move when market is closed??
Nam Vo
Nam Vo Nov 27, 2020 12:03PM ET
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I'm well aware of all the manipulation things, but you shouldn't be so sure about Monday. It's the last day of this month. It'll not be a good move to push the price up. Just let all the buyers give up and jump off the bridge =))
rajkumar kohli
rajkumar kohli Nov 27, 2020 12:03PM ET
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Gold is in crashing zone
Keith Messmer
Keith Messmer Nov 27, 2020 10:56AM ET
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i dont understand the markets reaction to this vaccine. the is no long term data, no idea of the effects on pregnant women, etc. there are entirely too many unanswered questions for the markets to be this excited about it. i would hold both gold and silver because if this vaccine has any issues the market will tank immediatly and hard
Michael Song
Michael Song Nov 27, 2020 10:56AM ET
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gold is not related with covid..gold was increasing before the sicknesss as well.  therefore there is no correlation. market manipulators (jp Morgan cartel) who makes money shorting it continuously use vaccine news as a reason and drags the price down as this is their mission.
Ayla Arida
Ayla Arida Nov 27, 2020 10:45AM ET
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Gold will drop to 1500$ second week since the vaccine will spread
Edward Chong
Edward Chong Nov 27, 2020 10:45AM ET
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u can slowly wait for the next 10 years to see if it reach 1500 again.
Juice Leskinen
Juice Leskinen Nov 27, 2020 10:07AM ET
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there goes my money but I will hold on to my gold
alex gallegos
alex gallegos Nov 27, 2020 10:07AM ET
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Me too.
Balazs Gal
Balazs Gal Nov 27, 2020 10:05AM ET
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Robots are taking over trading, great
Binh Tran
Binh Tran Nov 27, 2020 10:04AM ET
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both gold & dollar down, what is going on?
Robert DZ the patterns
Robert DZ the patterns Nov 27, 2020 10:04AM ET
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big banks' manipulation
Allatra Yiveh
AllatraYiveh Nov 27, 2020 10:02AM ET
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Paper contract naked short seller without any physical gold involved, as usual, the bankster criminal activity to suppress the gold price. This will be temporary.
Pratt Man
Pratt Man Nov 27, 2020 9:44AM ET
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SoftBank is driving equities higher on their purchaser of millions of more call options.. this is not investor driven. Very light volumes all week. The economy wont fully recover until 2022 and we're already at 37x earnings.
RANI RANAI
shamanpips Nov 27, 2020 9:29AM ET
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Vaccine has change the situation.investors has convert their investment from gold to assets.vaccines has reduce gold demand, and economic recovery is coming very soon
Kristof Naessens
Kristof Naessens Nov 27, 2020 9:29AM ET
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A vaccine does not cure the money printing and all the debt in the world. Once they figure that out, the stampede will drive gold and silver further upwards.
Basil Grivas
Basil Grivas Nov 27, 2020 9:24AM ET
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This is not a risk-on action. I am smelling deflationary bust No 2 coming... All asset bubbles that were correlated last 8 months will start popping... Cryptos and PMs were first, stocks to follow...
Philip Van Langenhove
moneytrondoctor Nov 27, 2020 9:22AM ET
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Biggest manipulation ever seen !! That's the result of trading paper gold ...gold you don't own !
Abdelraziq Abuaisha
Abdelraziq Abuaisha Nov 27, 2020 9:21AM ET
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This is where exactly gold was before it peaks after a one month run. Go ,, go do your best, it’s just a matter of time, but you should do your best:)
hlaing myowin
hlaing myowin Nov 27, 2020 9:21AM ET
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what is going on Gold?
Kristof Naessens
Kristof Naessens Nov 27, 2020 9:21AM ET
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Just the paper contracts messing around. Last day to cover some short contracts today for the november contracts.
 
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