Jakarta, CNBC Indonesia – World gold prices managed to slightly strengthen on Tuesday’s trading, after briefly approaching the level of US $ 1,900 / troy ounce. The collapse of the stock market in the United States (US) or Wall Street triggered a reversal in the price of this precious metal.
According to Refinitiv data, yesterday’s world gold price strengthened 0.11% to US $ 1,930.92 / troy ounce after previously slumping 1.17% to US $ 1,906.23 / troy ounce.
Meanwhile, today, Wednesday (9/9/2020), at 16:06 WIB gold slightly weakened 0.03% to US $ 1,930.34 / troy ounce.
Stock markets of the United States (US) which “bled” yesterday made gold reverse direction. The selling action that occurred in the technology sector triggered the fall of the stock exchange with the largest market capitalization in the world. Nasdaq Index collapsed 4.11%, S & P500 -2.78% and Dow Jones -2.25%.
Gold is a safe asset (safe haven) while stocks are risky assets, so both movements are reversed in the short term.
“We are seeing the rise in gold prices after the US stock market slumped which triggered asset buying safe haven. Investors are confused, they don’t know where the bottom level of the stock market is at the moment, “said Philip Streible, told market strategist at Blue Line Futures in Chicago. CNBC International, Tuesday (8/9/2020).
However, the rise of the US dollar limited the strengthening of gold prices. The US dollar index is getting away from the lowest level in more than 2 years after gaining 0.78% yesterday, and this morning it had risen 0.18% to 93.615 which became the strongest level in almost 1 month.
“Gold is trapped in a narrow trading range. If it is able to penetrate US $ 1,960 / troy ounce, the new gold will re-enter an uptrend,” said Streible.
Since hitting an all-time high of US $ 2,072.49 / troy ounce on August 7, gold has declined, never to return above the level of US $ 2,000 / troy ounce. Gold also moves with high volatility, meaning it has fluctuated significantly in a short period of time, the last few weeks.
However, in the last few days the volatility of gold has tended to be low and the price decreased, but it was still able to stay above US $ 1,900 / troy ounce.
Only once on August 12, gold fell to US $ 1,863.66 / troy ounce, but on the same day it also rose and ended trading at US $ 1,917.81 / troy ounce.
Since then, gold has never touched US $ 1,900 / troy ounce, every time it approaches that level, gold then turns up.
Therefore, Eugen Weinberg, head of commodities at Commerzbank, takes a neutral stance on gold.
“There is a lot that the market needs to digest. The consolidation period can take quite a long time without affecting long-term trends. At the moment, I do not see anything that can bring gold up above US $ 2,000 / troy ounce, or below US $ 1,900 / troy ounce, “said Weinberg as reported by Kitco, Friday (4/9/2020).
This means that when it approaches US $ 1,900 / troy ounce, gold will rise again, while when it approaches US $ 2,000 / troy ounce, gold is likely to fall back.
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