Gold has lost 15% since hitting a record $5,589 in January, but Suki Cooper, Standard Chartered’s global head of commodities research, says the worst of the selling may be behind it.
She argues that the sell-off follows a well-documented pattern in which investors liquidate gold to meet margin calls during market distress, a process that typically lasts four to six weeks before they rebuild their positions.
During the global financial crisis, it took more than four months. SPDR Gold Shares (NYSE:GLD) is currently trading around $435, down from its 52-week high above $509.
Gold Went From Most Overbought Since 1999 To Most Oversold Since 2013
Cooper notes that gold went from its most overbought level since 1999 in January to its most oversold since 2013. Options traders are pricing in volatility not seen since the pandemic.
As Benzinga previously reported, gold’s worst month …
This post was originally published here
