On the evening of the 11th, the prices of gold and silver plummeted, with gold falling by more than 4% and silver by more than 7%.

Free fall of gold and silverGive up the gains of the past week

After the frenzied rise of gold, it staged a market that quickly gave up its gains.

Spot gold prices continued to decline on Aug. 11, falling below $2000 an ounce around 14:30, giving up the past week's gains. As of 16:00, prices were back above $2000 at one point, falling more than 2 per cent to as low as $1989.49 an ounce on the day.

I have arrivedOn the evening of the 11th, spot gold continued to dive, falling below 1940 US dollars per ounce and 4.4 per cent on the day.It is down nearly $135 from its all-time high.Spot silver fell below $27 an ounce, falling more than 8% on the day.

This contrasts with the rapid rise in gold over the past period of time. After breaking the previous record high of $1921 an ounce on July 27, spot gold broke through the $2000 mark in the early hours of August 5 and further exceeded $2070 an ounce on August 7, up more than 7 per cent in two weeks.

In July, with the spread of the COVID-19 epidemic, precious metals showed an obvious bull market. Silver showed an obvious upward attack since July 20, with a cumulative increase of 40% in about half a month. Among them, the three trading days of July 21, July 27 and August 4 all increased by more than 8%, with the sharpest performance on July 27, with an increase of 11.54% for the whole day. At one point, the cumulative increase in silver reached 55%. If you look at the low of 11.64 US dollars per ounce in March, the increase has doubled in more than four months.

Why the sudden collapse?

Stocks rose after Trump said he was "seriously" considering a cut in capital gains tax. The news undermined safe-haven demand and pushed gold down for the third day in a row.

Analysts said that since August, gold has broken through the all-time high set in 2011, resulting in all short losses, closing positions one after another, and even some backhand long. In addition, a large number of retail investors followed, resulting in a soaring gold bubble. In this context, many institutions have cashed out, forming a recent technical pullback.

DailyFx strategists point out thatThe rebound in the US dollar and increased risk appetite weighed on gold prices. Gold prices have risen more than 14 per cent in the past three weeks and are now in consolidation. Gold trading attracted a lot of fast money last week, and gold prices are expected to usher in a more balanced rally after clearing speculative positions.

UOB of Singapore pointed out that preliminary data on CME gold futures showed that traders added nearly 12000 open contracts on Monday, reversing a three-day downward trend. The increase in open positions suggests that gold prices will fall further in the future, with a potential target of around $1980.

On Tuesday afternoon, significant progress was made in Russian vaccine research and development. The first COVID-19 vaccine was registered and the daughter of Russian President Vladimir Putin has been vaccinated.. The head of Russian sovereign wealth fund RDIF said he had received requests from more than 20 countries around the world to buy 1 billion doses of Russia's COVID-19 vaccine, Russia Today reported.

Although some experts remained sceptical in the absence of data from the third phase of the trial, the development boosted risk sentiment and suppressed safe-haven gold on Tuesday.

Meanwhile, White House adviser Kellyanne Conway pointed out that US President Donald Trump will hold a news conference on Tuesday to release an update on six coronavirus vaccines.

Market boss Peter Schiff said, "nothing goes up every day, and gold and silver will not be an exception to this rule." Without a bull market that is rising every day, there will always be moments of depression. "

Ole Hansen, head of Commodity Strategy, Saxo BankUs real yields and the US dollar have risen in recent days, eliminating the two main drivers behind the recent rise in gold prices. Gold is accelerating its decline as short-term traders who have taken advantage of the recent stock market rally want to exit the market.

However, Hansen believes that the fall in gold prices is a consolidation after a sharp rise earlier this year. Gold remains bullish due to rising inflation, negative real interest rates and the possibility of a yield curve in the US.

据George Gero, Managing Director of Royal Bank of Canada Wealth ManagementGold prices have fallen below $2000 an ounce, as profit-taking triggered stops, he said.

George Gero said, "the US stimulus bill has been shelved, global stock markets have improved, and the warmest news of the pandemic and Russia's current vaccine." As ETF sellers increase volatility, gold's profit recovery period offsets sell stops. Gero said. 'most gold buyers have been very sensitive to prices recently, which increases volatility,'he said.

"buyers may wait for the selling to fade, as the selling may receive a margin call and follow the selling the next day," he said. "

Us stocks gold and silver stocks fell collectively

As gold and silver prices fell, US gold and silver stocks fell collectively, with silver ETF-iShares falling by more than 7 per cent and gold ETF-SPDR by more than 4 per cent at one point. Pan am silver fell more than 7%, Barrick gold and Paramount gold fell more than 6%, Yamana gold fell nearly 6%, Newmont mining fell more than 5%.

Is this the end of the gold market?

Economist Citigroup IncGold prices will hit $2100 an ounce in the third quarter and could rise to $2300 an ounce in the next six to 12 months, according to the latest forecast; the risks to gold prices are mainly upside.

Ole Hansen, head of commodity strategy at Saxo Bank, pointed out thatReal US yields and the dollar have risen in recent days, eliminating the two main drivers behind the recent rise in gold prices. Gold is accelerating its decline as short-term traders who have taken advantage of the recent stock market rally want to exit the market. However, I personally believe that this round of gold price decline is the consolidation after a sharp rise earlier this year. Gold remains bullish due to rising inflation, negative real interest rates and the possibility of a yield curve in the US.

China Merchants BankIt is believed that the recent adjustment of precious metals is mainly due to the higher-than-expected increase in July non-farm payrolls data released by the United States on Friday night, the correction of real interest rates on US debt and a rebound in low levels, while the price of gold fell. In addition, gold experienced a sharp rise in the early period, in the technology is seriously overbought, long trading has been relatively crowded, there is a pullback demand.

But they do not think that the bull market in gold is over, and the current correction is normal after the rally. The first support level below is expected to be $1930. If it loses, it could fall into the support range of $1860-1900. From a trend point of view, real interest rates in the dollar are expected to continue to decline under the combined effect of the Fed's "policy hand" and the gradual recovery of the inflation hub. In other words, the rising logic of gold trend has not changed, and bulls can continue to hold.