This morning, at the opening of the week, Gold experienced a strong gap down of 30 points, falling to the 396x range.
The reason for this decline is believed to stem from China’s recent cancellation of its tax rebate program, which reduces a key incentive and could significantly weaken demand in one of the world’s largest metal markets.
However, investors did not panic, and gold prices recovered, trading steadily around the $4000/ounce level.
Still, this move by Beijing is expected to increase the cost of holding gold and reduce gold demand in major markets.
Therefore, in the short term, gold may face unexpected selling pressure during the Asian session and could slightly reverse downward in the short- to medium-term trend.
Technical analysis:
Gold prices are currently under selling pressure from the Asian session, but buying forces from lower price levels remain strong. In the short term, gold has the potential to recover slightly to the 402x range before starting to decline again.
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