Gold futures have continued to drop despite having hit what was termed as their lowest point since February. There is no sign of recovery for the Gold futures which have been falling for the past few months. They have shown volatility and signs of stunted growth for many months including the run up to the US elections. Both the Gold futures and the US dollar have continued to trade below par for the past few months causing investors to wonder what will follow next. “Gold is now as good as the US dollar,” uttered an IG analyst, Chris Weston in a note to the press.
“In the recent past, Gold was attractive to invest in especially during the time when the world was characterised by yielding interest rates which were negative. But, the scenario has changed as less negative yield outstanding bonds characterise the market. Since Trump was elected, the level of negative yield outstanding bonds has gone down by close to half. As such, the commodity is not as attractive as it used to be,” said Chris Weston in a statement to the press.
Against all odds
“There is no need to be afraid of the current market scenario,” added Chris Weston. “It is possible that the cards will be turned very soon based on a number of indicators which point in the direction of decreased selling,” said the analyst.
DXY dropped by 0.15 % despite rising above the 102 level. But, this is a rise which has since faded over the past few days.
On Wednesday alone, December Gold closed its trading day on a loss of 1.8 % after it registered a loss of $21.90.
Another stock to have lost was SPDR Gold Trust which ended its trading day after a humiliating 2 % decline.