Gold slips back more than $100 an ounce from new historic highs
Gold closed at new historic highs as early as Friday, the beginning of December. The level of $2071 per ounce was the highest closing ever. However, this is not the end of gold's upward price history. During the Asian session on December 4, the price of gold jumped above $2100, reaching levels near $2150 per ounce. This was a level more than 5% higher than the November close!
On the other hand, there have been many questions as to why gold prices rose so strongly. There may be several reasons. One is the growing connection to Bitcoin, which gained strongly over the weekend. Many factors are now having a very similar effect on both Bitcoin and gold. Also worth mentioning is the strong retreat in US yields in recent weeks. Yields on 10-year bonds have retreated from around 5% to "as low as" 4.2%. The recent weak dollar has also fueled gains in both Bitcoin and gold.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appToday, however, the dollar's strength prevailed, and in addition, we are seeing the realization of gains on gold after such a spectacular 2-day rally. The price has already fallen by more than $100 per ounce! On a daily basis, gold is losing about 1.2%, although it previously gained almost 4%. It is worth mentioning that the EURUSD is retreating by about 0.5% today, and on the chart we can see the formation of quite a divergence between the price of gold and the EURUSD.
Gold is retreating sharply, but it is worth noting the increase in net long positions and seasonality, which shows a positive December. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
