How much lower will it go?
Gold continued to fall on Tuesday, breaking below $1,740 and further losses could be on the cards.
The yellow metal has come under significant pressure as central banks have prepared the markets for the end of pandemic era stimulus and even rate hikes as early as next year.
Even higherhasn’t tempted traders back in, despite its reputation as a hedge, while yesterday’s bout of risk aversion also did nothing to lift it, quite the opposite.
That leaves gold languishing at seven-week lows and it may get worse yet. We have seen a small recovery today but that has only brought it back towards $1,740 – prior support – where it now seeing significant resistance.
A rotation off this level would act as confirmation of the initial breakout and could turn attention back towards $1,700, maybe even $1,680, last months flash crash low and long-term support.
Tough days may still lie ahead.
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