Precious Metal Prices Falter, but Odds are on Gold BullsGold prices dropped below $2,000 an ounce on Wednesday as the greenback gained some grounds, with gold traders awaiting minutes from the U.S. Fed’s last policy meeting.
In the past few weeks, the precious metal fortunes have been aligned to the direction of the falling US dollar as both assets reflect the prevailing narrative that the global financial system might soon be in a bubble.
Currency traders had momentarily gone long on the greenback on Wednesday morning, possibly due to better than expected US economic data released recently.
Gold Bulls had pushed the yellow metal price from $1,976 to $2,002/03 and held its ground at the price range amid the S&P 500 index gaining grounds on Tuesday. The precious metal regained its one-week high on Tuesday following the greenback’s plunge to May 2018 low.
Though the precious metal remained around the $2,000 area for most part of the Asian trading session, it slumped arbitrarily at the start of London’s trading session on Wednesday.
Gold traders had earlier been on the bullish wagon, when Berkshire Hathaway bought stakes a stake in significant gold miner Barrick Gold, buttressing sentiments that investors are moving their funds to deflationary assets
Warren Buffett’s entrance into the precious metal market may attract a new type of investor, who had previously been wary of the bullion metal.
Gold bulls are aware of the present world we live in that contain prevailing macros such as high geopolitical uncertainty, resurgence of COVID-19 and most of all, an already over-bloated financial system.
These fundamentals are expected to trigger gold traders in keeping price relatively above the $1,800 area in the mid-term assuming macros such delay Russia’s registered COVID-19 vaccine approval comes to play and the global economic recovery goes to the wind.