Gold is now trading at $1,584.40, down about -3.85%, well below its 200-day moving average of $1,612.80, causing traders to wonder if the record streak of closings above the average is about to come to an end. And if it is, where will the new floor be?Crude oil prices are dropping as well. WTI crude is now trading at $95.54/barrel and Brent crude is trading at $105.73/barrel. WTI crude is down more than -4.5% and Brent is down nearly -3.8%.
Today’s sell-off is very likely the product of continuing concern over the European financial mess, which traders thought to be solved last week, but have now admitted that the sunny conclusion was too hasty. The overall outlook for global economic growth has also declined, meaning that energy requirements will also decline.
As for gold, it is probably feeling the impact of the euro falling below $1.30. If investors continue to move into the dollar, gold’s status as a safe haven diminishes. There’s not guarantee that that is what’s happening, but it’s not a bad guess.
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