Gold continues to fall

by Nov 25, 2020Market Reviews

Gold continues to fall

Gold continues to fall on positive vaccine news, as both Pfizer and Moderna reveal trials that show 90%+ efficacy vaccines against the Coronavirus.

Gold continues to push downwards to that key 50% retracement level

Gold breaking key technical factors

Gold breached a fundamental Fib level at $1,835, looking for a next internal support/resistance level at $1,800 and the 50% retracement level at $1,761.

Gold flowing out of ETF’s

Gold outflows from Gold Back ETF’s

There has been a steady outflow of Gold in Gold-backed ETF funds peaking around September, where the SPDR Gold Shares ETF held around 1,300 tonnes of Gold. However, now they are around the 1,200-tonne levels.

This sustained drop has been pushing the idea that Gold all along has been rallying on the back of a self-perpetuating notion, on consistent risk-off sentiment alongside speculation from investors.

Gold’s fundamental long term trends may not be able to stop it from dropping

Many have pointed to inflation and currency debasement as factors to move the yellow metal higher. However, this may be more relevant as long term trends that will see Gold push higher form a lower price in the next 3-5 years. Goldman Sachs stated that the risk of inflation is “greater than any other time since the 1970’s”, citing green spending plans in China, Europe, and in the United States with President-Elect Joe Biden at the helm.

As risk on gets into play, the rotation out of bonds and into risk-on assets will force bond yields higher, making the opportunity cost of investing in Gold lower as it does not offer income as Bonds do. Geroge Gero, a managing director at RBC Wealth Management, stated that “the fear of missing out seems to be more important,” therefore forcing some selling pressure in the Gold market.

Furthermore, Macquire bank stated that the “cyclical bull market” for Gold has come to an end, with Marcus Garvey, Macquarie’s head of metals and bulk commodity strategy, said that “[the bank] is reasonably constructive on the global growth outlook for next year, so we think Gold has passed its peak.”

Are you looking at Gold?

 

Related Posts

Stocks coming into 2021 – Boom or Bust?

Stocks coming into 2021 – Boom or Bust?

Stocks coming into 2021 – Boom or Bust?

Here are two fun facts from equities in 2020.

· The NASDAQ returned 46% from the start of 2020. If you purchased at the peak of the recessionary period in mid-March, you would’ve made a return on investment of 85%.
· Meanwhile, the S&P500 only returned 17% from the start of 2020.
· The average price/earnings ratio for stocks in the NASDAQ was pushing 23
· The best performing stock that is in the S&P 500 and NASDAQ was Tesla, providing a 743% Return.

With that in mind, what are we expecting for stocks coming into 2021?

read more

Black Bull Group Limited (trading name: BlackBull Markets) is a New Zealand registered and incorporated company (company number: 5463921).
We are also registered with the Financial Services Provider Register (number: FSP403326).

Black Bull Group UK Limited is registered in United Kingdom, Company Number - 9556804. Payment clearing services provided by: BlackBull Group UK Limited (Company Number - 9556804) Address - 483 Green Lanes, London, Greater London, United Kingdom, N13 485

Risk Warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.

All payments related to the Paysafe Group are facilitated by Black Bull Group Limited.

Copyright © 2021 Black Bull Group Limited. All Rights Reserved.

Share This