Gold Sees Worst Week in Two Months

  • Gold's bull run has lasted so long due to its high reliability and because it is such a tangible item.
  • The Swiss National Bank may hike the gold rate again this week, causing yet another sell off in the market.
  • Gold prices have continued their fall since hitting an all-time high over the summer, and they have even fallen over the past two weeks.

Gold faces its worst week by a few notches, as it attempts to hold onto its recent gains. There are mixed signals coming from the market, and traders have become divided in their opinion of whether this is a good or a bad week for gold. Gold gained 0.3% to $1796.77 an ounce by 06:22 GMT after slipping more than 2% to the lowest level since last December.

Gold is a chemical element with the symbol Au (from Latin: aurum) and atomic number 79, making it one of the higher atomic number elements that occur naturally. In a pure form, it is a bright, slightly reddish yellow, dense, soft, malleable, and ductile metal.

This comes as the Chinese New Year approaches and investors buy massive amounts of gold as they try to ride the waves of economic instability.

Gold’s bull run has lasted so long due to its high reliability and because it is such a tangible item, something that people can actually hold in their hands.

Gold futures gained 0.3 percent to $ 1,797. However, this week’s drop is not the worst for gold that it has experienced this month.

On the contrary, it may just be a little bearish on gold. The average gold price is up by just over one percent, which is far lower than most analysts expected it to be. Perhaps the recent global financial crisis and the threat of economic war have pushed gold prices lower.

“The biggest risk to gold is stronger recovery as vaccines roll out, to the extent that we see US bond yields rally,” said Lachlan Shaw, National Australia Bank’s head of commodity research. “However prices could remain supported if the rollout faces uncertainty because of emerging virus variants.”

Silver grew 0.4% to $26.40 per ounce, but it remained down 2.1% for the week. The price of oil has plummeted almost 12% after it peaked eight years ago. Platinum increased from $1,104.15 to $1,024.55, and palladium earned $2,305.21 to $2,254.41.

There are also speculations that the Swiss National Bank will hike the gold rate again this week, causing yet another sell off in the market. The rumors and predictions have caused gold investors to double up their investments in the precious metal, although this is nowhere near to the peak reached in August 2021, when investors saw the value of gold soaring.

If gold prices continue to fall this week, then this is an ideal time for any gold investor to enter the market. Gold tends to move in a predictable pattern, rising for the first time and then continuing its fall before rising again. This provides investors with a clear indicator of how the gold price will behave over the coming week.

Gold prices have continued their fall since hitting an all-time high over the summer, and they have even fallen over the past two weeks. The drop in gold prices has been led by predictions that the Chinese government will devalue the Renminbi.

Gold traders are worried that the government will withdraw the currency from the international market, reducing the value of the Renminbi. If this happens, then the Chinese buyers who previously bought gold will be forced to sell their gold at higher prices.

The renminbi is the official currency of China and one of the world’s reserve currencies. The yuan is the basic unit of the renminbi, but the word is also used to refer to the Chinese currency generally, especially in international contexts. One yuan divides into ten jiao, and a jiao in turn divides into ten fen.

Gold investors should take advantage of this weakness in the market and purchase more gold now while the prices are still low.

As the Chinese economy picks up, and economic growth continues, the Chinese government may be more willing to loosen its grip on the Renminbi.

In fact, rumors have been circulating that the central bank has stopped buying gold, but this hasn’t been confirmed.

In addition to government officials, some private citizens have sold gold themselves in an attempt to reduce the pressure from the Chinese market. There are many websites on the internet that allow individuals to post information about their gold positions.

It is possible that some people will be interested in buying from you, and you may even be able to sell the gold for more than you paid— allowing you to walk away with a profit.

Gold bullion has traditionally been a safe-haven investment, and it is unlikely that this trend is changing any time soon. The current economic and political situation in China means that the People’s Bank may intervene in the market and stop the flow of cash out of the country. This would be bad news for gold buyers, but good news for investors.

If the PBOC does try to intervene, the gold price will likely be driven up, and this will only be good news for the Asian economies. This means that gold is in a strong position to weather this storm as there are signs that the Chinese economy is rebounding.

Doris Mkwaya

I am a journalist, with more than 12 years of experience as a reporter, author, editor, and journalism lecturer." I've worked as a reporter, editor and journalism lecturer, and am very enthusiastic about bringing what I've learned to this site.  

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