Gold’s per ounce price decreased $129 in the international market on Tuesday, marking the biggest one-day decline in seven years for the precious metal.
The gold price touched a new high of $2,063 on August 6 but has been moving down since then. An announcement made by Russian President Vladamir Putin that Russia has developed an effective coronavirus vaccine has significantly effected gold’s price, which even took a dip to $1,867 on Wednesday as gold apparently lost the ‘safe haven’ appeal for investors.
In Pakistan, a tola of gold reached an all-time high of Rs132,000 on August 8 but fell to Rs126,100 on Tuesday.
HG Markets head of business development Rashid Ali says more developments of a COVID-19 vaccine may turn the situation more bearish for gold as it tends to lose safe haven appeal as economic distress reduces.
During the course of writing this report, gold prices bounced back to $1,937 per ounce in what remains the most volatile trading day for the yellow metal in recent history. It not only recovered to its opening value of $1,912 an ounce but also ended up $20 higher when this report went online.
Arif Habib Commodities Managing Director and CEO Ahsan Mehanti says apart from news of the vaccine, the dollar has strengthened, which has also contributed to the downward movement of the price of gold.
He said that dollar and gold values move against each other and when the dollar weakens, investors move towards gold and when the dollar strengthens, investors move towards equities.
During March, the gold prices hit a low of $1,471, but they have been moving up since then, crossing $2,000 in August which broke a nine-year record. The last few trading sessions indicate gold is facing resistance above $2,050 per ounce and a support below $1,900 an ounce.