The gold market saw a highly volatile open last night in which a new all-time high was set in dollars, as well as many other currencies.
Gold already saw a record close on Friday, closing at $2,072 per ounce for the weekend. Some had suggested gold could open at a new all-time high, but few were expecting the extreme climb and subsequent fall seen so far.
As markets opened initially on Sunday gold saw some slight gains before the real excitement began at 23:14 GMT. Gold didn’t just rise at this point, it soared higher, gaining more than $100 in just a few minutes. Prices were so volatile many feeds struggled to keep up, but gold quickly pushed past $2,100 to set a current intra-day record of $2,198.54, an incredible rally in such a short time span.
The following new records were set:
It remains unclear what sparked such a significant rally; gold has seen gains recently on speculation over interest rate hikes ending, but it seems highly unlikely this could have spurred such a huge gain in a short period. More likely would be some kind of significant gold purchase on open, such as a central bank, which subsequently triggered margin calls.
The sudden gains also clearly prompted some profit taking and put enough pressure on the price to not only end the rally, but also reverse it. After gaining 6% in 30 minutes, gold has steadily fallen as the day has gone on, and is currently trading below Friday’s close, $2,044 at the time of writing. It is unusual for gold to act this way; these kinds of fast gains are more typically seen in silver.
The next week will be an interesting one then, gold setting a new record in dollars is always big news, and when it blasts past the previous record attention is garnered across the financial world. Many will be looking at how high gold climbed and thinking the current reversal could be a good chance to get back in before it climbs back to those levels. Without knowing the reasons behind the climb however, it is unclear when gold will get back above $2,100.
A slower, healthier climb towards $2,200 will likely mark a true new level being reached for gold, but it has certainly been an interesting 15 hours, and reminds investors that gold is still a highly relevant asset as we head into 2024.