The price of Gold has been falling for several days. At currently $1,708, Gold has lost a lot. If you look at the high from the beginning of last week at $1,764. The basic mood was and is (we think) positive for a further rise in the price of Gold. The central banks are printing money at breathtaking speed and the states are getting more and more into debt. And therefore the fundamental drive of many investors towards the “last real refuge” called Gold should continue.
But why has the market broken the upward trend of the last few days? Some economic data that has come in over the past few days (see for example here) has been feeding investors’ hopes that the rebound following the corona crisis will be followed by a rapid economic recovery. This hope may be early, but it is what the market is currently experiencing. The stock market is trading the future, and as a risky investment, share prices have been able to make good gains in recent days (Dow 30 gained a good 1,000 points since last Friday). This has of course weakened Gold as an interest-free commodity.
Gold price before a sudden turnaround?
Will the situation in the Gold price suddenly change tomorrow or more likely Friday? Because the tensions surrounding China’s new security law for a tighter grip on Hong Kong are not diminishing. Donald Trump recently said that something is being done at the moment. He thinks the public will find it interesting. It’s very powerful. Before the end of the week, Trump said he would present his plan. It is reasonable to assume that because of the Hong Kong Security Law, the US will impose sanctions on Chinese politicians, companies and banks? Anything is conceivable.
And how the market will react to this is, as always, unclear in advance. It could be the trigger for an intensification of the trade war. The mood on the stock market could quickly tilt and the Gold price, which is currently still held back by hopes of an economic upswing, could suddenly jump high. As of today, the upward trend in Gold has been interrupted. This can be seen clearly on the chart, which shows the development of the Gold price in US Dollars over the past 30 days.