If ever there was an instrument that reflected the global fundamentals accurately, it has to be gold. This was proved yet again this week as the gold prices did what we believed it would, based on the happenings and the events over the last few days.
Recently Gold has been making some good moves on the market and it has been a fight between bulls and bears ,which eventually the bears came out victorious after the US elections a couple of days back. I had chosen to be a bear on gold for some time and it had been a good decision , looking at the current position its at now in the market.
It had been said at the beginning of the week that as Hillary was expected to win, we can expect the stock markets to be cheerful and gold to take a hit and this is what happened at the beginning of the week. It was also mentioned that the opposite is likely to happen if Trump were to win and unexpectedly, Trump won and the stock markets reacted violently to that and they crashed initially. This caused gold prices to shoot up initially to as high as 1337 and it was threatening to do more. But sanity returned as the markets digested the news and the investors and traders came to a conclusion that the situation was not as bad after all.
We saw the markets reverse and the stock markets shot up and gold fell and this was the scenario that played out yesterday as well. The stock markets shot through the roof while gold prices crashed through 1300 and the price was even threatening to crash through the strong support at 1250 as USD began to gain to strength across the board, which it eventually did. Now the gold prices rests around 1227.69 per ounce.
The gold markets fell hard on Friday, as we sliced through the $1250 support. With the US dollar heading for the stars, it is putting a lot of bearish pressure on the gold markets and we did in fact hit a current low of 1227.69. Because of this, I feel that it is only a matter of time before a rally appears, but it should show signs of exhaustion that you can continue to start selling again. I have no interest in buying gold at the moment. I think the $1200 level is the first place where we will see buyers really make a stand, which is also a strong support area.