Gold falls by 1.7% and back below the $2,000 mark
The correction in gold and silver continues to start the week as we see the former fall by 1.7% in a drop to $1,991 while the latter is seeing a drop by more than 4% and under $28.
There has been a strong sense that gold is one that has moved too far, too fast - even when tracking above $1,900 initially. But the resilience over the past two weeks has been astounding, though we are starting to see signs of exhaustion finally catch up.
As mentioned before, given how gold has behaved recently and how much it has been hyped up as a consensus trade as of late, any correction or pullback can be rather violent.
This ~1% drop perhaps isn't much for now but it could lead to a sharper fall in the coming sessions, especially now that sellers are seizing back near-term control:
The 200-hour MA (blue line) @ $2,007.04 will be a key spot to watch but psychologically, closing back under $2,000 will be a real blow to gold bulls for the time being.
The long-term prospects for gold remain as brilliant as ever, but patience is the key when it comes to this trade. For now, the exuberance and hype has gone a little overboard but one can expect dip buyers on any sharper pullback closer towards $1,900.
