Gold News: Have The Gold Trading Dynamics Changed?
Gold News
In the latest gold news: As of November 20 at 9:36am EST, gold was trading at $1289.05 per ounce, remaining constant at a relatively bounded fluctuation rate. At approximately this time last week, gold was trading at $1277.40 per ounce.
On Friday last week, November 20th, the price of gold shot up for a brief moment, nearing the ceiling of $1300 before dropping back down over the weekend on the strength of the dollar. It has almost become regular news for this to occur, and these rapid pendulum swings are looking more and more normal for gold’s trading pattern. Of course, as consistently reported, this trading pattern has been heavily dependent on geopolitical tensions. So much so, in fact, that analysts are calling this type of uncertainty the new normal. A recent report by Citi analysts stated, “Event-driven bids for gold seem to be occurring more frequently and may be the new normal […] In short, even as the rates and forex channel dominate the outlook for gold pricing, the yellow metal is increasingly being used by investors as a policy and tail risk hedge”. This closely ties in to what was discussed in previous articles: gold has become something of a paper trading commodity, such that it it heavily reactive to events and bases itself in very reactive movement.
This pushes the question as to whether gold has begun to trade differently than is expected from it as a safe-haven commodity. Furthermore, and perhaps more importantly, is how investors should take this in to account when looking at gold pricing and possible investment. There is a general consensus that gold prices are going to increase over the next year, and that investors can expect to see prices going up to nearly $1400. There is also an idea that investors are slowly moving away from gold and that in the long term we might see gold drop back down to around $1000. An example of this is that there have recently been more searches on the topic of how to buy bitcoin instead of how to buy gold. Digital currencies are emerging in the market today and are becoming highly relevant and important when discussing the trading of commodities. While it is dubious that gold will ever be replaced by a digital currency, recent trends in trading indicate that investors are looking for more volatile investments on which to make money quicker.
This sentiment remains prevalent and is causing the bullion to remain somewhat steady below this year’s high. In the 90-day gold prediction ending September 16, I Know First’s algorithm based on a stock prediction algorithm showed an impressive 100% accuracy rate, as seen in “Gold Price Predictions Based on Deep Learning: Returns up to 5.24% in 3 Months.” After a month, I Know First’s average percent change came out to 5.22% with XAU as the top earner, bringing in an impressive 5.24% return to investors.
