Gold opened higher on the day and touched $5196 in a quick spike to start the day.
It barely lasted a minute though and it’s been straight lower since then with gold now down $102 to $5066, about a 2% decline. Silver is 3% lower.
Last week, gold was lower overall but it rallied in Asian trading hours each day.
That spell appears to be broken as it’s turned into something of a ‘sell everything’ mode as oil prices spike once again. WTI is up $14.75 to $107.41 on the day.
Ultimately, the disarray in global markets and a potential recession due to high oil prices is good for gold. A spike in inflation would also add to the allure of gold.
But in the short-term, the turmoil in markets is the kind of thing that leads to traders paring risk and gold is a crowded and leveraged trade. It’s not a pretty picture at the moment in anything as US equity futures fall another 1.6% and Japanese futures fall 3%.
This article was written by Adam Button at investinglive.com.
