Gold prices hit by selling wave
Gold prices lost more than US$20 in an hour, dropping from around US$1695 to US$1671. The historic oil plunge drive traders to sell their assets fast.
Currently gold trades around US$1678, losing 1% on the day.
Aside from other deep effects, the oil plunge has boosted deflationary efforts worldwide and put pressure on the gold’s status as a defense against inflation. US dollar, meanwhile, is making gains.
Traders expect gold prices to stabilize just under the last highs. The growing demand from investors seeking safe havens is expected to keep the prices at this level for at least a year.
The next swing might come after the publication of the US Home Sales data. The report is likely to impact the US dollar, as well as gold.