Gold Prices Crash to $1,670, Recover Swiftly Above $1,730
- Gold tumbled over 5% on Monday, reaching a low of $1,670, before erasing some losses
- Silver was also pressured, slipping nearly 10% to $22.06, a price level last seen in November 2020
Gold Prices Crash to $1,670
Gold prices hit their lowest level in about five months in early Monday trading. The precious metal’s price slipped roughly 5.5%, or over $90, to reach an intraday low of $1,670 per ounce during the Asian trading session.
While gold slipped, silver tumbled around 10%, or roughly $2.20, to reach lows near $22, a price level last seen in late November 2020.
On the other hand, a strong US dollar has pulled ahead of competitors on the currency board. The greenback rally started on Friday after a stellar jobs report showed the US economy added 943,000 new hirings to the labor market.
The price jitters in gold continued during the entire trading day yesterday. At one point, gold had regained as much as $82 from its steep and sudden decline. However, market participants could not buoy the asset for long enough and the precious metal closed the day at $1,730, lower by $33, or a loss of slightly under 2% on the day.
Silver Struggles to Rebound
Silver was also on the losing side on Monday. A largely unsuccessful afternoon attempt to rebound lifted silver’s price higher by about $2, almost erasing the decline. The momentum was not strong enough and silver went back under pressure, ultimately closing the day at $23.40, lower by $0.90, or 3.6%, on the day.
The strong US employment report suggested the Federal Reserve could bring forward the expected reduction of monthly asset purchases, currently standing at $120bn in bond buying per month. As the Fed is considering scaling back, or tapering, its monetary stimulus, the US central bank is also preparing to raise interest rates as soon as early 2023.
While the continued economic recovery is reflected in the latest jobs print, some analysts warn that the current Delta virus wave sweeping across the US could pose increased uncertainties and threaten to undermine the swift economic bounceback.
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