$680 support missed, Gold drops another $25 to $655
Spot gold has missed initial support at $675, and started a rapid drop as big as $25 to $655.
Gold has started a short term burst since 24 April after it broke the trading range $620 - $635. (see my previous post) The price was like a sky rocket and kept rising until it broke $700 and made the 25 years record high of $730.
Now a big correction finally started, and it has dropped about $75 which was about -10%. The basic supporting factors has never changed, but at this high price it was not the real demand that drive gold price up. A big portion of the gold inventory was bought by investors and funds. And since gold market (as well as commodity market) is relatively small compared to the world stock market. Any bigger profit-taking action can bring a shock to gold price.
The long term trend is always positive. But in short term the fluctations is unpredictable. I believe if gold missed $650, it should show a strong support at around $635.
Gold has started a short term burst since 24 April after it broke the trading range $620 - $635. (see my previous post) The price was like a sky rocket and kept rising until it broke $700 and made the 25 years record high of $730.
Now a big correction finally started, and it has dropped about $75 which was about -10%. The basic supporting factors has never changed, but at this high price it was not the real demand that drive gold price up. A big portion of the gold inventory was bought by investors and funds. And since gold market (as well as commodity market) is relatively small compared to the world stock market. Any bigger profit-taking action can bring a shock to gold price.
The long term trend is always positive. But in short term the fluctations is unpredictable. I believe if gold missed $650, it should show a strong support at around $635.
posted by SSY | 7:34 AM
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