Gold’s many qualities make it one of the most coveted metals in the world. Not only can it be beautifully shaped and sculpted, the yellow metal also conducts electricity, doesn’t tarnish and is biocompatible (meaning it’s not harmful to our tissue). These qualities make it the metal of choice in a wide variety of industries, including dentistry and medicine, electrical engineering, construction and aerospace manufacturing.
First it was the U.S. Federal Reserve. Then, in 2013, Japan launched what became known as Abenomics. The European Central Bank (ECB) followed suit in 2014. And now the People’s Bank of China has joined the parade.
By far the biggest storyline in the markets this week has been the precipitous fall in the price of gold. After closing just below key support at the 1140 level last week, bullish traders panicked this week, driving the yellow metal down by a whopping 5% from last Friday’s close as of writing.
Given the persistence of the support level at $1,180, the market may see the current level in gold as a bargain opportunity to enter low risk buy trades, especially if the dollar pulls back after its big rally.