Stocks fell. Bonds fell. Gold fell too. What is going on?
On Friday something rare happened. Tech stocks dropped. Gold fell about 3.5% and slipped below $3900. Bitcoin was under pressure too.
$XAU We are always told that gold protects you when markets crash. This time it did not.
Here are three reasons I think this happened:
Cash needs. After big tech losses and margin calls people sell what they can sell fast. Gold sells fast.
Oil and inflation fear. Higher oil raises the fear of higher interest rates.
High yields. When US Treasuries or dollar cash pay a good return with no big risk gold looks less attractive. It pays no interest.
Where is gold now?
Price is near $3875 to $3900. That is about 30% below the January peak.
Levels analysts are watching:
• $3886 support Standard Chartered says gold must hold this
• $3750 to $3820 is the next zone if support breaks
• $3457 in a deeper scenario. That is about 11% lower
JPMorgan Private Bank says gold will find a solid bottom only when interest rates peak. So pressure may stay while rates keep rising.
The other side:
A Reuters poll of analysts shows a median year end forecast of $4495. But many forecasts in October were far too high so I do not trust them blindly.
Add one personal line here about how you see gold or what you are waiting for
What I am watching:
• The 10 year yield
• The Fed decision in December
• Whether tech selling continues
Will gold hold $3886? Tell me in the comments.
#BinanceUpdatesProofofReservesAddresses
#BinanceToResumePhaseOneOfWithdrawals
On Friday something rare happened. Tech stocks dropped. Gold fell about 3.5% and slipped below $3900. Bitcoin was under pressure too.
$XAU We are always told that gold protects you when markets crash. This time it did not.
Here are three reasons I think this happened:
Cash needs. After big tech losses and margin calls people sell what they can sell fast. Gold sells fast.
Oil and inflation fear. Higher oil raises the fear of higher interest rates.
High yields. When US Treasuries or dollar cash pay a good return with no big risk gold looks less attractive. It pays no interest.
Where is gold now?
Price is near $3875 to $3900. That is about 30% below the January peak.
Levels analysts are watching:
• $3886 support Standard Chartered says gold must hold this
• $3750 to $3820 is the next zone if support breaks
• $3457 in a deeper scenario. That is about 11% lower
JPMorgan Private Bank says gold will find a solid bottom only when interest rates peak. So pressure may stay while rates keep rising.
The other side:
A Reuters poll of analysts shows a median year end forecast of $4495. But many forecasts in October were far too high so I do not trust them blindly.
Add one personal line here about how you see gold or what you are waiting for
What I am watching:
• The 10 year yield
• The Fed decision in December
• Whether tech selling continues
Will gold hold $3886? Tell me in the comments.
#BinanceUpdatesProofofReservesAddresses
#BinanceToResumePhaseOneOfWithdrawals
