The “flash crash” of gold price on Aug 9th was still a shock to many traders. We did expect some drops or crashes since the vaccines started to work and were delivered worldwide. However, no one could foresee this much. Now, the price of gold has recovered slightly from the shock. But most analysts believe gold will still go down.
The falling of the gold price is pegged to the jobs report as well as the behavior of the U.S dollar. As the dollar gets more robust, the cost of gold goes down. It seems like the Asian market triggered the falling on the gold price last Friday because of buying the U.S dollar and selling the gold. The Federal Reserve is expected to dial back monetary easing and slow its stimulus efforts as the economy recovers from the pandemic. The U.S. central bank has held rates near zero, but officials have signaled that hikes could happen soon, especially with inflation running hot. A stronger U.S. dollar means gold price might continue to decline well into 2022.
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