Such poor showing in the month of November comes as no surprise, taking into account that global investors sold off their bullion assets and channeled the funds into riskier investments like global stocks and exchange-traded funds.
At the time of writing this report, the precious metal was trading at around $1787/ounce, For the month of November, the precious metal lost for the third consecutive week, dropping 6% in value, month to date.
What this means
Global investors are primarily reducing their bullish bias, taking into consideration the most recent testimony from U.S Treasury Secretary, Steve Mnuchin, and US Federal Reserve Chairman, Jerome Powell, on Monday to the Senate Banking Committee. Though both hinted that the world’s largest economy was on the path to recovery, they emphasized on the need for a lifeline.
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on why the yellow metal could face more selling pressure in the coming weeks, taking into consideration, market sentiments that the future looks bright:
“Flashing green lights at the end of the tunnel suggest investors should look through the immediate COVID-19 considerations and give attention to the long run, which appears extremely shiny and bullish. So, with month-end promoting strain largely out of the best way, it might enable traders to give attention to these flashing inexperienced sectoral lights on the finish of the Covid-19 tunnel.”
What to anticipate
Nonetheless, gold merchants could be cautious of taking bearish bets blindly, even when it appears just like the tunnel’s finish is in sight relating to the COVID-19 pandemic, on the bias that market situations are usually not sure what the panorama will appear like on the opposite aspect.