The gold price is steady and traded just below $1,600 after a few turbulent trading sessions. On Friday many traders reduced their long position on bullion, which sparked a sell off that arrived in conjunction with a strong correction of the indices of the major markets. The discussions about the reasons behind this fall are long and complicated. Certainly, some traders were closing their positions to grab money to cover other positions near to margin calls, while other investors have viewed the recent bullish rally as having gone too far too soon. Furthermore, there are also some concerns about Asia’s jewellery demand in the next few months.
Technically we can find a first support level placed at $1,585, with significant space for further recoveries if stocks turn again in red in the next few days, but also if hopes for a new stimulus from central banks become reality. In this second case, we could have a surprising positive correlation between gold and stocks, which could both react positively to this scenario.
