Gold Plummeted $100 amid Improving Market Confidence

WikiFX News (11 Nov.) - On Tuesday, gold prices plunged to $1,850 as risk appetite grabbed a huge bid both on the positive news of Bidens victory and Pfizer's Covid-19 vaccine and on the rising US Treasury yields. In future trading, gold is expected to see further losses.

The US pharmaceutical company Pfizer lately announced that it had reached a critical milestone in vaccine development. Meanwhile, Biden declared victory in the US election last weekend. The two great news boosted market risk appetite, with the S&P 500 as well as the Dow Jones once hitting a record high. However, gold as a traditional safe-haven asset suffered heavy losses that once slumped over $100.

This Monday, the 10-year US Treasury yield registered its biggest gain of 14.32% since March 17. The improving market confidence is weighing on gold.

The daily gold chart shows a large bearish engulfing candle made on Monday. This candlestick will crimp further upside and may cause further falls in the precious metal. The downside should find the closest support around yesterdays low at $1,850, where a breach below will push gold back to $1,836.

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Chart: Gold Trend