The gold market is ending the week with another massive move. After rising to a 13-month high Thursday, gold gave up all weekly gains Friday, falling $40 on the day.
This idea that the Fed could somehow pull off a soft landing has encouraged profit-taking after gold hit $2,063 an ounce this week — just inches away from record highs. Also, the latest producer price index numbers showed that inflation might have peaked, giving the Fed room to pause after May's 25-basis-point hike, said Gainesville Coins precious metals expert Everett Millman.
In contrast, Federal Reserve Governor Christopher Waller said Friday that there is little progress on inflation and rates will need to move higher. "This is more of a technical selloff than anything," Forex.com senior technical strategist Michael Boutros told Kitco News."Pent-up long positions are coming off. But price pullbacks should be limited. The war is still going on, and there is a devaluation of the dollar as a global standard. This will help the gold rally stay afloat long-term."
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I agree. I use to call it 'shaking the tree': the investors that are not hang with conviction will drop assets while sharks collect them at a good price before skyrocketing. It has happen to me in the past when setting stop losses at their reach.