Gold has recently sunk to a 52-week low, making it the main topic of conversation. On Monday and Tuesday, gold dipped below £705.52. Even before its decline, it was on a losing streak of more than 7% a year. Despite this, many gold strategists believe that it will not stay down for long, as this has only ever happened 5 times in this products history. George Gero a precious metals strategist at RBC (Royal Bank of Canada) Capital Markets said “One large trade, rather than a change in fundamentals sparked Monday’s 2.2% sell off in gold”, which completely distorted the markets.
Brian Stutland from Equity Armor Investments pointed out that this commodity crush could be something positive as it can provide an opportunity to jump into the market. Since 2000, every time new lows have been this high, gold and miners have rallied for over three weeks. According to Mr Stutland, gold has fallen so quickly that it makes sense to take the opposite side, and for a technical trade, it is likely to play for a quick bounce back.