Gold’s falls have been pronounced recently as key support at $1780 broke lower on Tuesday this week. These sharp falls have led some investors to ask, ‘Is gold’s dip a buying opportunity?’
Investors should be aware of the impact that inflation, yields and the USD has on gold. If you are unclear on that you can refresh yourself here with a video that outlines gold’s key drivers. The current position is that a strong USD and rising real yields look set for gold to remain pressured for now.
However, if the fundamental position changes, then traders should be aware of the strong seasonal pattern for gold.
Over the last 15 years the gold has risen 12 times between July 19 and September 3. The largest loss was over 15% on 2008. The largest gain has been 17% in 2011 and the average gain has been 3.23%.
Major Trade Risks: If the USD and Real yields keep moving higher, then gold can remain pressured.
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