The rates of gold in the global market slipped down on Friday the 23rd of November, as the dollar regained some of the momentum that it had lost earlier in the day and the stock markets of Europe improved the risk sentiment for investors.
The recent gold price increase was seen due to the interest of investors in gold as a safe haven option to safeguard themselves against perceived economic and sociopolitical uncertainties. However, now that those uncertainties seem to have passed, and that the dollar and stock markets in the Europe are back regaining lost ground; gold has lost the appeal it had.
Spot gold decreased by some 0.4 percent during the day and is currently at $1,221.92 per ounce. All gold futures expected to be delivered by December fell by 0.47 percent to reach the price of $1,222.10 per ounce in the market.
“It’s really the dollar’s move… If gold breaks below $1,220, prices can quickly go to $1,200,” said Dawei Hou, who is currently a precious metals trader at MKS SA.
Still, however, the gold market has remained significantly quiet, as investors are looking for a clear catalyst or an influencer that can move this market out of the tight range that it has followed for some time now.
Gold prices have been tight within a $13 range during this week, partly due to the Thanksgiving activities this week, and the lowered interest of investors.
Additionally, news from Europe has revealed that European stocks opened higher on Friday. This development took place after a poor week of trading with prices showing volatility and going down. The business growth for Euro zone was much weaker than expected, due to the slowing growth in the global economy, a trade war involving the United States, and a sharp decrease in the exports for the region.
All economists and strategists have their eyes fixated now on the G20 summit, where Trump would be meeting the Chinese premier on the sidelines of the event, as both the figureheads discuss the trade war and the future course of action.
“If there is nothing in terms of an agreement at the summit, there will be pressure on stocks. If there is an improvement, gold will go lower as people come back to stocks. People are now looking at the dollar as a safe haven,” said Dawai Hou.
On the technical front of things, gold currently is trading above the moving averages for 50 and 100 days. These higher moving averages are supporting the prices at the lower end, said a Hong Kong based trader.
Spot silver also fell by some 1.6 percent during the day and reached the price of $14.25 per ounce. ABN AMRO analyst Georgette Boele believes that Silver has been following and tracking the results of gold throughout this period.
“Investors have been disappointed with silver, so they try to see if it breaks in the upside and every time it doesn’t, they quickly sell it again,” said Boele.