Gold plummets in biggest single-day crash in 7 years

Gold has fallen below $1,900 for the first time since July 24 and is currently trading near $1,880 per ounce on Wednesday after recording the biggest single-day decline in seven years on the previous day.

Prices fell by 5.72 per cent on Tuesday as the US 10-year yield jumped by over six basis points as the zero-yielding yellow metal usually faces selling pressure when yields rise.

Stocks gained as investors rested optimism on falling US Covid-19 hospitalisations and stimulus talks. Treasury yields also jumped, further hitting gold's relative value.

Precious metal analysts said many gold traders were "looking for an excuse to lock-in profits" and found a reason to sell in Russia's coronavirus vaccine approval.

"Gold is fast approaching support of the ascending trend-line rising from March 20 and June 5 lows, having breached the psychological support of $1,900 a few minutes before press time. The yellow metal is currently trading near $1,880 per ounce and the rising trendline support is located at $1,860. The 14-day relative strength index has breached the trendline representing the bull-run from lows near $1,450 seen in March. The indicator is now hovering in bearish territory below 50," they said.

issacjohn@khaleejtimes.com

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.