admin
XAU/USD: Gold falls more than 3% from its wartime high as demand for safe-haven transactions declines
Gold has fallen more than 3% from a yearly high due to the war as tensions between the US and North Korea ease and investors turn to riskier assets. XAU/USD is currently trading around 1,780 USD/ounce, down 0.5% from the previous session.
Gold jumped to $1,840 an ounce on November 8, its highest level since February, when the US announced that it would not accept North Korea’s launch of a new intercontinental ballistic missile. However, after North Korea announced that it was willing to negotiate with the US and its neighbors, tensions eased and gold prices began to decline.
Gold was also pressured by a recovery in the dollar, the world reserve currency, after the US Federal Reserve (Fed) said it would continue quantitative easing (QE) until the market collapsed. complete recovery. The USD tends to move against gold prices, as it increases the cost of the precious metal for investors using other currencies.
Additionally, gold must also compete with riskier assets such as stocks and cryptocurrencies, as investors seek higher returns amid rising inflation and low interest rates. Global stock indexes hit record highs this week, while Bitcoin surpassed $60,000 for the first time in history.
However, gold could still benefit from a number of supportive factors, such as physical demand from major gold consuming countries such as China and India, as well as demand from gold exchange-traded funds (ETFs). According to the US Treasury Department, global gold ETFs increased by 13.8 tons of gold in October, marking the first monthly increase since January.
Technically, gold is trading in a short-term bearish channel, with resistance at $1,800/ounce and support at $1,760/ounce. If gold breaks resistance, it could head towards $1,820/ounce, the November high. If gold breaks support, it could head towards $1,740/ounce, the October low.
