Gold prices plunged on November 30 in what might be its worst in four years. Investors are taking up riskier assets as hopes for the COVID vaccine to revive the global economy increases.
Spot gold lost around 1% to reach $1,771.22 per ounce by 04:52 GMT. So far, the precious yellow metal has lost 5.7% in November, which is its biggest monthly drop since November 2016.
The chief strategist at CMC Markets, Michael McCarthy, commented:
“vaccine-inspired optimism about an economic bounce is eroding the attraction of safe-haven investments like gold.”
Furthermore, the unfortunate plunge of gold below $1,800 was another trigger for the sell-off. Investors and traders are now waiting for congressional testimony by the United States Federal Reserve Chairman Jerome Powell this week. Gold has proven to be a shield against inflation and fiat debasement.
On its part, silver lost 2.9% to trade at $22.03, platinum fell 0.5% to reach $959.13 while palladium was down 0.2% at $2,420.36.
Next Support Awaits At $1700
Citibank analysts have downgraded their gold-price predictions for 2021 and their estimates for flows in gold ETFs, in the face of economic enhancements in the developed economies.
“Net investment into gold ETFs to hit 800 tons in 2021, 75 tons less than previously forecast and 50% lower again in 2021.”
The analysts see the next support at $1,700 in the short term. They also said that there might be price rallies for industrial commodities like copper, which may indicate a rotation from risk-averse to risk-on assets.
There might be a move above $2,000 in the next 3-6 months, but if there is not fiat crisis due to recent stimulus packages, gold prices might then trend lower.
