Gold Prices Plummet
In a surprising turn of events, gold prices took a sharp dive on August 5th (Vietnam time), plummeting over 2% in just a few hours as a sell-off in the stock market spilled over into the precious metals arena.
The precious metal breached the $2,400 per ounce mark, sliding from an intraday high of $2,458 to $2,360 per ounce, resulting in a staggering loss of $98 per ounce during the session.
Despite gold’s allure as a safe-haven asset, it wasn’t immune to the sell-off as investors scrambled to cover margin calls on other assets. “Gold’s volatility signals the level of panic attacking stock markets,” remarked Adrian Ash, research director at Bullionvault.
Global stock markets endured a brutal trading session at the start of the week, with Japan’s stock market experiencing its worst Monday since 1987. The Topix and Nikkei 225 indices plummeted more than 12% on August 5th, signaling a bear market ahead. US stocks also took a beating, with Dow Jones futures plunging 1,050 points, or 2.6%, as of 7:30 p.m., August 5th (Vietnam time), following Friday’s 611-point drop.
The rout in global equities is attributed to mounting fears of an economic recession in the US, prompting investors to dump risky assets. Friday’s data revealed a surge in US unemployment to 4.3% in July, increasing the likelihood of a rate cut by the Federal Reserve in September, with expectations of a 50-basis-point reduction.
Some analysts attribute gold’s decline to the spillover effect from the stock market sell-off. According to Kitco News, Han Tan, market analyst at Exinity Group, stated: “Escalating geopolitical tensions and expectations of Fed rate cuts will create supportive conditions for bullion. Ultimately, gold could reach new record highs once the dust settles.”
Reference: Kitco News
Market Update on February 2nd: Oil, Copper, Iron & Steel, Rubber, and Sugar Prices Decline, Gold Surges to Almost 1-Month High.
At the end of the trading session on February 1st, the prices of oil, copper, iron and steel, rubber, and sugar all dropped, while natural gas hit a nine-month low and gold reached its highest point in nearly a month.
Market Update on February 3rd: Crude oil, gold, copper, iron and steel, and rubber all decline together.
At the close of trading on February 2nd, the prices of oil, gold, copper, steel, rubber, and coffee all saw a simultaneous decrease, with iron ore hitting a two-week low.
