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Gold Price Scenario

Knowing the context of Friday’s sharp decline, the lack of activity on the precious metals market yesterday holds significance. Abrupt drops can lead to swift rebounds that negate the previous movement, especially if the decline was accidental or triggered by news that does not alter the overall trend. The time it takes for the market to shift from an emotional reaction to a logical approach can vary based on the type of event or news that triggered the movement. For instance, gold once rallied after the ECB increased rates, but the market eventually realized that it was bearish for gold, not bullish. In contrast, when Russia annexed Crimea, it took a relatively long time for the market to adjust and move below the pre-annexation levels. The lack of a powerful rebound after Friday’s slide suggests that the downward trend could persist.

There are two noteworthy points regarding yesterday’s price action. Firstly, on the long-term chart that includes gold, silver, junior miners, and the USD Index, there is a visible trend

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