Well, it had to happen at some point. And yesterday’s heavy selling and profit-taking certainly underscored the potential pitfalls of the consensus trade. That continued into Asia trading today, with gold having fell to a low of $4,004 earlier. However, dip buyers stepped in near the figure level and gold is now up well above $100 from the lows today. And that dampened the mood for precious metals on the day itself. A lot of it has to do with profit-taking and corrective price action, as one can come to expect more volatility spikes amid such a heavy consensus trade in the market over the past two years.
And even with the drop yesterday, it hardly puts a dent in gold and silver amid the surge higher all throughout this year.
For now, the inability for sellers to break below $4,000 still shows that dip buyers are holding on to relatively modest appetite. That even as we see a break under the key hourly moving averages above.
The next challenge for dip buyers now will be to try and get back above the 200-hour moving average (blue line). That is seen at $4,174 currently. If sellers can hold that line, we could see more profit-taking and corrective action down the road
