The precious metal is now down nearly 1% on the day on the headline above. That being China halting its gold buying for reserves after an 18-month stretch.
For some context, the PBOC is the biggest net buyer of gold last year. So, there is some importance to the headline. That being said, I would argue that it does not change the structural outlook for gold in the bigger picture.
In the short-term though, traders might get spooked by the headline here. I mean, gold is still in my view overdue for a deeper correction after the surge to above $2,400.
The early June lows at $2,314-15 are still in place. So, the latest dip here isn’t one to signal any major technical breakdown in gold just yet.
This article was written by Justin Low at www.forexlive.com.
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