Gold Price Declines On Profit Booking, Analysts Say Market Was Getting ‘Increasingly Nervous’ On Sustainability Of Rally

• Spot gold prices were hovering at $4,018 per troy ounce, down by nearly 9% from the all-time high of $4,381 that the yellow metal touched last week.
• Gold futures maturing in December declined more than 2% to fall to $4,021 before recouping some of the losses.
• Analysts at ING Think ascribed the fall in gold price to profit booking.

Gold prices extended their decline on Wednesday after falling by more than 5% on Tuesday, after a surge of more than 7% over the past month.

Spot gold prices were hovering at $4,018 per troy ounce, declining by 2.6%. Gold futures maturing in December declined more than 2% to fall to $4,021 before recouping some of the losses.

Gold Price Down Nearly 9% From All-Time High

Spot gold prices are down by nearly 9% from the all-time high of $4,381 that the yellow metal touched last week.

Analysts at ING Think ascribed the fall in gold price to profit booking.

“Spot gold prices sold off aggressively yesterday as participants took profits in a market that has been extremely overbought.”

— ING Think

Trump’s Trade Talks With China Putting Downward Pressure On Gold

It also pointed to the over 30% surge in gold prices since late August, which saw the yellow metal surge from $3,000 to over $4,000.

“Clearly, market participants were getting increasingly nervous over the sustainability of the uptrend. In addition, comments from President Trump that he expects a ‘good deal’ when it comes to trade talks with China have only added to the downward pressure on gold.”

— ING Think

On Tuesday, President Donald Trump stated that he has a good relationship with Chinese President Xi Jinping and that he expects to be able to strike a good deal, according to a report by Bloomberg. However, he also added that it is possible that his meeting with President Xi might not materialize.

Meanwhile, the SPDR Gold Shares ETF (GLD) was down 1.62% at the time of writing, while the iShares Gold Trust ETF (IAU) fell 1.6%. The GLD and IAU ETFs have both surged 56% year-to-date. Retail sentiment on Stocktwits around the GLD ETF was trending in the ‘extremely bullish’ territory at the time of writing.

Also See: Dow Futures Are Little Changed As Investors Turn Cautious After Trump’s China Comments: TSLA, NFLX, DKNG, GEV Among Stocks To Watch

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