Gold Slides Below Weekly High, Remains Stable
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- Current developments monitored closely by market participants
- The precious metal experiences its lowest this week
Gold is currently trading at $1,915, down 0.90% since its Monday high of $1,933. The precious metal started depreciating at the opening yesterday due to a lack of results for additional financial aid by the US government. Market participants are closely monitoring the developments leading to an agreement for a stimulus package and seemingly, putting the negotiations on hold leads to risk-off behavior for gold and higher grounds for the US dollar.
A report published earlier today stated that the Johnson & Johnson vaccine study has been temporarily paused as a participant has experienced unexplained illness symptoms. The news brought more uncertainty about the approach taken by governments to tackle the spread of the coronavirus.
Details surrounding this case are still unclear. It is clear, however, that investors still have to worry about the possible effect of the pandemic as we head into colder months that allow for the easier spread of viruses.
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Gold Goes Down to Its Lowest Weekly Level
Today, as an intraday risk-off indication, gold went to its lowest weekly level at $1,909 just before the opening of the European trading session. As EU stocks opened flat across the board, gold climbed up to reach the current market price.
On the technical side, yesterday’s top at $1,933 acted as the inflection point also arguably influenced by the 50-day SMA. Well above the 200SMA at $1,750 and slightly above the 100SMA at $1,918, gold hasn’t been doing very well month to date relative to US equities.
To put things in perspective, the Dow Jones Industrial Average is up 3.6% or 1,018 points since Oct 1 up until now. The S&P500 is up 5.00% or 168 points for the same period. Whereas Gold Is only up 1.78% or $33. It has to be noted, that gold has outperformed both indices by significant margins year-to-date as the precious metal is up 26.7% YTD, while the DJIA is down -0.10% YTD and the S&P500 is up 8.50% YTD.
It should come as no surprise that investors are in favor of gold in the midst of a global pandemic, economic downfall, and uncertainty moving forward.
The precious metal made a historical record high earlier this year when it rose to $2,069 on Aug 6. The previous record high was $1,920 reached on Sep 6, 2011.