Gold settles at lowest price in nearly 3 weeks

“While gold has dropped last few sessions, it’s important to note that October finished with new all-time record monthly closes for gold priced in dollars, in euros, yuan, yen, U.K. pounds and in most other major currencies,” Adrian Ash, director of research at BullionVault, told MarketWatch,

To get prices to those levels, “it took a surge of bullish speculation in Comex futures and options, the second fastest jump on current data, flipping from net short before Hamas’ dreadful attacks in Israel,” he said. “But the price jump also left the physical market struggling to digest these higher levels, and most investment markets actually [saw] profit-taking rather than any kind of ‘gold rush’.”

Ash said private investors as a group have used the latest monthly record highs to take profits and rebalance their position overall.

BullionVault users as a group sold 67.2% more gold than bought on average each day last month, with net selling totaling 470 kilograms in October — the “heaviest one-month liquidation since June 2019,” he said.

BullionVault’s Gold Investor Index, which it describes as “a unique measure of actual trading behavior among the world’s largest single pool of private investors in physical precious metals” was down down by 1.4 points to 51.8 in October, the lowest since January’s 3.5-year low of 50.6, said Ash.

All in all, it’s “very clear that the risk-on trade is back in the market,” taking the shine off gold as a precious metal, said Naeem Aslam, chief investment officer at Zaye Capital Markets. U.S. benchmark stock indexes traded higher in Tuesday dealings.

Zooming out and looking at the price trend for gold, “there was a real good run in terms of prices and small retracement was coming,” he said. But overall, “we still continue to hold a bullish position on gold as Diwali season kicks in, which usually increases demand for the precious metal.”