Spot Gold Slumped 5%, Recording the Biggest Loss in 7 years

Spot gold price plunged $115.00 or 5.70% to $1,911 an ounce yesterday, the biggest daily dollar slide in over seven years, as investors turned optimistic that a coronavirus vaccine would come soon.

Gold 1

Spot gold price plunged $115.00 or 5.70% to $1,911 an ounce yesterday, the biggest daily dollar slide in over seven years, as investors turned optimistic that a coronavirus vaccine would come soon.

Russian President Vladimir Putin said the world's first Covid-19 vaccine are ready to use, even before clinical testing has finished.

Besides, U.S. President Donald Trump said he is seriously considering a capital gains tax cut, which also increases the investors risk appetite.

Spot Gold (Short Term): Turning Down


Source: GAIN Capital, Tradingview

Technically, the spot gold prices sharply retreated with a long range bearish candlestick on a daily chart. Currently, the prices broke below the 20-day moving average.

The relative strength index dramatically fell from the overbought level and also broke below the rising trend line drawn from March. 

Bearish readers could place the nearest resistance level at $2,015, while support levels would be located at $1,770 and $1,715.


Spot Gold (Intraday): Further decline expected


Source: GAIN Capital, TradingView

On a 1-hour chart, Spot gold has recorded a series of lower tops and lower bottoms since August 7, indicating a bearish outlook.

The relative strength index is capped by a declining trend line drawn from August 5, suggesting the downside momentum for the prices.

In this case, as long as the resistance level at $1,930 (the previous high) is not surpassed, gold prices could consider a further downside to the support levels at $1,845 and $1,820.


More from Gold

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.