(Bloomberg) — Gold slid the most in four years, after gaining for weeks in a rapid rally that has stretched technical indicators.<\/p>\n
Bullion fell by as much as 3.8%, after hitting a fresh peak of $4,381.52 an ounce on Monday. Gold\u2019s ferocious rally has measures like relative strength indicating that prices have passed well into overbought territory. A strengthening US dollar has also made precious metals more expensive for most buyers.<\/p>\n<\/p>\n
Most Read from Bloomberg<\/p>\n
Haven demand for precious metals has cooled somewhat as US President Donald Trump and China\u2019s Xi Jinping are set to meet next week to iron out their differences on trade, and a seasonal buying spree in India has ended.<\/p>\n
\u201cIn the last couple of trading sessions traders have increasingly been looking over their shoulders, as concerns about a correction and consolidation have arisen,\u201d said Ole Hansen, commodities strategist at Saxo Bank AS. \u201cIt\u2019s during corrections that a market\u2019s true strength is revealed, and this time should be no different, with an underlying bid likely keeping any pullback limited.\u201d<\/p>\n
<\/p>\n
With the ongoing US government shutdown, commodity traders have also been left without one of their most valuable tools \u2014 a weekly report from the Commodity Futures Trading Commission that indicates how hedge funds and other money managers are positioned in US gold and silver futures. Without the data, speculators may be more likely to build abnormally large positions one way or another.<\/p>\n
<\/p>\n
\u201cThe absence of positioning data comes at a delicate time, with a potential build-up in speculative long exposure in both metals making both more vulnerable to correction,\u201d Hansen said.<\/p>\n
Volatility in precious metals has surged in recent days, with traders seeking to hedge against potential price drops in other parts of their portfolios, or profit from the fall. More than 2 million options contracts linked to the world\u2019s largest gold-backed exchange traded fund were traded on both Thursday and Friday of last week, surpassing a previous record.<\/p>\n
What Bloomberg Strategists say…<\/p>\n
\u201cAs of now, ETFs\u2019 gold holdings in absolute terms haven\u2019t reached the peaks hit in the past, and rallies have often extended for much longer. But history shows that momentum eventually fades and in most cases, the buying morphs into selling. If delayed data eventually reveal a sturdier US economy than anticipated, a larger gold pullback may not be far off.\u201d<\/p>\n
\u2014Tatiana Darie, Macro Strategist. For the full analysis, click here.<\/p>\n
Silver also slumped after surging almost 80% this year \u2014 with gains driven by some of the same macro factors supporting gold, as well as a historic squeeze in the London market. Benchmark prices are trading above New York futures, which has prompted traders to ship metal to the UK capital to ease tightness. On Tuesday, silver in vaults linked to the Shanghai Futures Exchange saw the biggest one-day outflow of silver since February, while New York stockpiles have also fallen.<\/p>\n
Gold fell 3.4%% to $4,208.73 an ounce as of 2:21 p.m. in London. Silver traded 5.1%% lower at $49.78 an ounce, after plummeting as much as 6.2%.<\/p>\n
–With assistance from Sybilla Gross.<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Gold slid the most in four years, after gaining for weeks in a rapid rally that…\n","protected":false},"author":3,"featured_media":321472,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[3638,64,57034,160882,160881,15386,67,132,68],"class_list":{"0":"post-321471","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bloomberg","9":"tag-business","10":"tag-commodity-futures-trading-commission","11":"tag-commodity-traders","12":"tag-ole-hansen","13":"tag-precious-metals","14":"tag-united-states","15":"tag-unitedstates","16":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115412863816871489","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/321471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=321471"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/321471\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/321472"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=321471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=321471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=321471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}