(Kitco News) Investors are very cautious and are choosing to stay on the sidelines with just days left until the U.S. election. This low volume mixed in with uncertainty is what’s triggering the aggressive price action in gold, according to TD Securities.
“With a few days to election day, speculators aren’t ready to stick their necks out. The event-risk is keeping money managers on the sidelines — a context which is seeing low volume and aggressive flow combine into sharp price action,” TD Securities strategists wrote on Thursday.
Also, the pace of gold accumulation has stalled, which is visible through the flattening of the ETF holdings in October.
“With investment demand on pause and physical demand still lackluster, it didn’t take much in terms of global macro forces to send prices lower,” the strategists wrote.
On Thursday morning, gold tumbled to a daily low of $1,859.20 an ounce. Since then, December Comex gold futures managed to recover somewhat and were last trading at $1,871.70, down 0.40% on the day.