Kitco: Three Key Reasons Why Gold Prices Are Going Down

After hitting new all-time highs in mid-July, gold has sold off sharply. It ended the month near its 50-day moving average, down over $100 per ounce from its peak. Silver similarly sold off, dropping under $28 at its peak.

Part of the selloff was based on market data. The economy continues to grow. Inflation, while still on the high side, shows signs of abating. Those conditions aren’t the best for precious metals to prosper.

Plus, gold has had a strong run so far this year. As with investors shifting out of tech stocks, there may be some profit-taking at play. Given that market volatility is rising, but isn’t yet at panic levels, supports that reason.

In the meantime, investors are waiting for interest rates to decline. Expectations for interest rate cuts have been around for a while. The idea of “higher for longer” on interest rates this cycle took some time to take hold.

In the meantime, investors interested in the metal should expect to see some support around $2,275, and $2,220. The first price is the 50-day moving average. The second is where there’s been considerable support for gold prices going back to March.

Those looking to buy and hold should start adding at those price points. Those looking to trade can use gold options, or gold mining stocks, to leverage a move higher.

To look at the full reasons behind gold’s latest decline, click here.