SMM: the precious metals market fell sharply this week, but the downward trend finally showed signs of a temporary halt, with gold prices back around $1870 an ounce.
Carsten Fritsch, an analyst at Commerzbank (Commerzbank), said both gold and silver were oversold after this week's slump.
"the RSI of gold and silver is around 31 and 25, respectively, a level last seen during the March sell-off."
Affected by the epidemic in March this year, U. S. stocks were once repeatedly circuit breakers, in the market in urgent need of liquidity, gold was dragged down together.
Spot gold prices briefly fell below the $1850 / oz mark this week, setting a new low for more than two months. At one point, silver plunged nearly 20% to around $21.7 an ounce.
Fritsch believes that the downward trend of gold and silver prices is likely to be reversed.
"the 100-day moving average has been reached, so it is likely to reverse and pick up. Gold prices are likely to rise much more than fall in the coming weeks. "
Fritsch said that the overall macro environment for gold and silver has not changed, and under the Fed's current monetary policy, the dollar is unlikely to continue to rise.
(TD Securities) of TD Securities pointed out that the recent rebound in the dollar has put a lot of pressure on gold, but this downward trend in gold prices is unlikely to continue in the long term.
"the death of US Justice RBG, the signs of the epidemic, the dollar problem and the uncertainty of the upcoming US election all mean that gold has strengthened for a long time."
The bank said the long-term bull market in gold had not changed because long-term inflation expectations were likely to continue to rise after the US election, especially if there was a new round of bailouts.
"Gold bulls who entered late have been under a lot of pressure recently."
In addition, gold ETF holdings are also rising, indicating that investors still have investment demand for gold.
The liquidity of the investment system (CTA) is now due to a further sell-off in gold and silver. Therefore, while the overall market risk is still very large, the risk borne by the gold market is limited. "