According to some analysts, the yellow precious metal entered the final stage of correction, which will be accompanied by a massive reduction in speculative long positions and will be completed by mid-December.
As expected, there was a rebound from the level of $1,450 per ounce, which was drowning around $1,475–1,485. What to expect next?
Ahead are several important events that could have a significant impact on the cost of precious metals, namely: the transition from December to January futures contract for gold on the COMEX exchange and the final meeting of the Federal Reserve this year.
It should be noted that the main speculative "longitude" in the gold market now sits in December contracts, the expiration of which should take place on the twentieth of November. Their elimination can lead to a significant drawdown of quotes. The main speculative volumes were taken in July this year at about $1,430–1,450 per ounce. In order to force speculators to liquidate their positions and shake up the market, and at the same time close their unprofitable short positions, market makers will have to sell the price below these levels or even below $1,400 per ounce.
The next Fed meeting will be held on December 11, at which the regulator may well take a break in the process of cutting interest rates. The US economy is still in good shape, and the US stock market is breaking historical records and is literally drowning in optimism.
By this time, news of the conclusion of the first phase of a trade agreement between Washington and Beijing may also arrive.
All these factors can play in favor of a decrease in the exchange rate of gold, which will be an excellent opportunity for purchases of precious metals.
The material has been provided by InstaForex Company - www.instaforex.com