Gold prices retreated below $1,862 after hitting the record hig

  • Gold prices retreated below $1,862 after hitting the record high of $2,074.92 on August 6, which is because traders have widely dumped their long position in the fear of the declining risk aversion considering Russia has successfully registered the COVID-19 vaccine. Thereafter, bargain hunting spurred gold to reclaim the ground of $2,000, but the resistance ahead of $2,015.61 hampered gold again and took a toll over $100. Whether gold will regain its shine and register another record high has become the talking points across financial markets.To get more news about WikiFX, you can visit wikifx official website.

      Traders actually have kept an eye out for opportunities to liquidate their position at a profit after noticing the sharp rise in gold prices. The reason lies in the purpose of gold purchase. Traders buy gold not for long-term holding, but simply for profiting. Once the trading prices appeal to them, they will sell out for bumper profits and wait to buy on dips after the next slump.

      In fact, financial markets have definitely achieve a consensus that various vaccines from countries worldwide will be available in the short term, which will certainly accelerate the recovery in global economics and weaken the risk aversion. Under such condition, the central banks of various countries may reduce or even suspend the quantitative easing.

      The U.S. dollar index, the largest influencing factor of gold prices, has also shown a rebound mainly because the European Central Bank Minutes showed that its monetary policy is more dovish than that of the FED with a cascade of PMI data much worse than that in the U.S. As a result, the Eurozone is obviously the weaker one in the comparison of the economic and monetary policies of the two areas, which may cause a steep rebound in DXY and then suppress gold prices. As DXY sees its most critical resistance at the level of 94, a breach above there will negatively impact gold prices, pushing them to break through the support level of $1,862 and move forward to another significant one of $1,765.