Factors that cause gold to fall in price
The new record rise in the price of gold has once again attracted the attention of many investors and increased the popularity of this asset.
At its peak, the price of one troy ounce exceeded 2,150 US dollars, which became a new maximum in the history of trading.
But the price increase did not last as long as investors had hoped, and after reaching its peak, the price of the precious metal began to gradually decline.
And soon it surpassed the psychological mark of $2,000. Currently, the price of gold is at $1,988 per troy ounce.
I've noted more than once that today it's more profitable to profit from price fluctuations rather than use a " buy and hold " strategy. Buy at lows and sell as soon as factors emerge that could cause a decline in gold prices.
These factors include:
Rising interest rates in the US. Rising interest rates make gold less attractive to investors seeking higher-yielding assets.
Declining inflation. Declining inflation reduces the demand for gold as a hedge against inflation.
Improving global economic conditions. An improving economic situation reduces demand for gold as an asset that can be used to hedge risks.
A pullback after a strong rally —this pattern is so common that it can also be considered a technical analysis factor. If gold rises more than a couple of percent in a short period of time, be prepared for a price decline.
Here are a few more factors that could cause gold prices to decline in the near future:
- The outcome of the negotiations between Russia and Ukraine. If the negotiations are successful and a peace agreement is reached, this could lead to a decrease in demand for gold as a safe haven asset.
- US election results. If the Democratic candidate wins the election, this could lead to higher interest rates in the US, which, in turn, could reduce demand for gold.
- US Inflation Dynamics. If inflation in the US slows, this could lead to a decrease in demand for gold as a hedge against inflation.
As soon as you see the above news, you should think about selling your gold or opening an unsecured sell transaction.
In the current situation, all that remains is to wait for the price to fall even lower and then open a new buy trade.
This time I didn't manage to catch the very peak of the price; the gold purchase transaction was closed at $2,080 and brought in about 8% profit, which is quite good considering that this is not my first gold transaction this year.
You might be interested in:
Brokers I use to trade gold: https://time-forex.com/vsebrokery/brokery-zoloto-serebro
Gold trading on the trading platform - https://time-forex.com/interes/torg-zoloto-terminal
