With Bitcoin still holding strong in position, the prices of Gold have dropped below $1,700 per ounce this morning.
A sudden fall on August 9 brought gold prices below $1,700/oz, bringing it to its lowest level since March.
During Asian trading hours on Monday, the price of the precious yellow metal fell to $1,690/oz, according to Tradingview. Gold has now recovered slightly, with the price last changing hands for $1,742/oz at the time of writing.
Since trading above $1,900/oz at the end of May, gold has dropped 4% in the last seven weeks and 8.7% since that time.
So far in 2021, the precious metal has lost 8%, and it is already down 14.6 percent from its all-time high of just under $2,040 in August 2020.
Peter Brandt, a forex trader and chart expert, blamed the crash on wholesale liquidations, saying, “This has all the fingerprints of a bank/brokerage house conducting forced liquidation upon a huge leverage speculator.”
He pointed out that the leverage ratio on the Chicago Mercantile Exchange’s gold markets is roughly 15 to 1, implying that heavily leveraged traders are driving price action for gold.
The plunge this morning was partly attributed to “stop-loss linked selling in very thin market conditions,” according to analysts at London trading firm City Index.
However, U.S. unemployment numbers were also a catalyst for a drop in commodity prices last week. According to a Bureau of Labor Statistics report released Friday, the jobless rate fell higher than predicted to 5.4 percent from 5.9 percent, a new low for the epidemic era.
With the labour market and broader U.S. economy continuing to improve, City Index concluded:
“The better jobs data sent the US dollar and US bond yields higher, never a good formula for commodities.”
Bitcoin is currently worth 25 ounces of gold, down 28.5 percent from its all-time high against gold — a single BTC was worth 35 ounces of gold during Bitcoin’s all-time high of nearly $65,000 in mid-April.
At the start of 2021, one Bitcoin was worth 15.5 ounces of gold.
According to CoinGecko, BTC had dropped 2% in the previous 24 hours to $43,667 at the time of writing.
