The turmoil on stocks seen earlier this week and particularly the greenback’s recovery are hitting gold. The Dollar Index gained by 1.5% to 94.2, which was enough to generate a sharp fall for the yellow metal. The sharp decline below $1,920 demonstrated a weakness for bullion, something not seen for quite a few weeks, with the price then plummeting too easily to $1,880 with increasing volatility.
Technically, we are now approaching the support zone at $1,860, which generated a strong rebound earlier in August. This is an important area to monitor, in order to understand if bullion can remain in the trading range of $1,860-$2,070 of the last few weeks. We should anyway remember that central banks’ policies are not yet changing, and ultra-low rates will last for a long time. In other words, we should probably be cautious before calling the end of the golden age for gold.
