After sliding on Friday Gold took massive dive overnight, plunging as much as 5.5% in morning trading, hitting a low of around 1072. This dragged a majority of commodities the same way as the dollar strengthened across the board as investors focus on the timings of a US rate rise.
It was the first time Gold traded below $1,100 since early 2010 and its lowest mark since November 2009. Other precious metals subsequently followed suit; platinum down 3.8%, silver 1.8% and palladium trading down 1.5% at their low.
The drop on Friday was thought to be attributed to China revealing how much Gold they had purchased over the past 6 years (now holding 1,658 tonnes) which was much less than analysts market consensus of nearer 3500 tonnes, thus having a knock on effect on the share price of Australian mining companies.
These drops have since been extenuated by events overnight leading to fears Australia could turn into a ‘new Greece’ with rising debt and a slump in Chinese demand for resources signalling a possible tough time ahead Down Under.
The massive move in the price of the yellow metal this morning was caused by heavy selling on the Shanghai Gold Exchange, with some 5 tonnes of gold being sold within half an hour of the market opening. Way above normal levels
Both WTI Crude and Brent Crude are also down 0.2% today, trading at 50.83 & 56.67 respectively
Before the beginnings of the recent slump; the gold price had been moving sideways since early February 2015 and although the overnight blip quickly recovered half of it’s fall, it has shown no sign of recovering the rest, hitting resistance at 1119, now trading at 1112 and looking fairly weak with the US trading session now over an hour old.