Short Term Gold Correction/profit booking/ Short Covering Expect

9시간 전

Gold has been rising steeply from 2635 till 2745 strongly without breaching once the trend line created. This is not usual activity.

The Political equilibrium which is totally disturbed due to war zone created between middle east, is at core to boost the reason for gold to spike up !.

On the contrary, if the gold rally has to survive the gold rally ok 105$ and counting up has to book certain profits and halt its upward trajectory.

Several factors can contribute to a steep upward rally in gold prices. These include:

Geopolitical Tensions: Conflict, war, or heightened global political instability can push investors towards gold, a traditional safe-haven asset. Any uncertainty can lead to a surge in demand for gold, driving up prices.

Inflation: When inflation rises, the value of fiat currencies tends to erode. Investors turn to gold as a hedge against inflation, increasing demand and boosting prices.

Interest Rates: Lower interest rates tend to drive gold prices higher, as the opportunity cost of holding non-yielding assets like gold decreases. Central bank decisions to cut rates or maintain loose monetary policies can trigger gold rallies.

Currency Fluctuations (USD): Since gold is priced in U.S. dollars, a decline in the dollar's value often results in higher gold prices. A weaker dollar makes gold cheaper for holders of other currencies, increasing demand.

Economic Data: Poor economic data, such as weak employment figures, low GDP growth, or decreased consumer confidence, can spur gold buying as investors seek stability.

Central Bank Gold Purchases: When central banks increase their gold reserves, it can signal confidence in gold as a store of value, leading to higher prices. Large-scale purchases can directly impact market demand.

Stock Market Volatility: When equity markets experience significant downturns or volatility, investors often flock to gold as a defensive asset, leading to price rallies.
Financial Crises: During times of global financial instability or banking crises, gold becomes a go-to asset for investors seeking safety, contributing to strong price rallies.

Supply Constraints: Limited mining output or disruptions in gold supply (e.g., due to strikes, political issues in mining regions) can contribute to higher prices if demand remains strong.
Speculative Demand: Traders and speculators can drive prices higher in anticipation of the above factors, especially in times of uncertainty or market panic.