""Gold is going through a long overdue correction, with the driver today being the positive noise on the trade talk front," said Ole Hansen, head of commodities strategy at Saxo Bank. "We may have seen the high for the year as a deeper correction may take longer to recover from as traders turn a bit more cautious, and the stock market continues higher.""
"A blistering rally that propelled gold to a record high just above $4,380 an ounce last Monday has since gone into reverse on signs the metal had become overbought. The so-called debasement trade and bets on Federal Reserve rate cuts had been the recent drivers of gains, bringing in retail speculators that helped send prices to overbought territory. Gold is still up by more than 50% this year, underpinned by strong buying from global central banks."
Gold slid below $4,000 an ounce, extending losses after a rapid record-high rally reversed amid signs of progress on a US-China trade deal that reduced haven demand. Spot gold dropped as much as 3.1% following concerns the recent record-breaking rally had become overbought. The rally to just above $4,380 was driven by debasement trades and bets on Federal Reserve rate cuts, which attracted retail speculators. Gold remains more than 50% higher year-to-date, supported by strong central bank purchases. Market participants at the LBMA conference noted robust attendance and a growing talent war for bullion traders. Analysts cautioned that a deeper correction could be healthy, with $3,500 cited as a potential target.
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