World gold price today (August 3) dropped sharply as risk-averse investors in the market did not provide much support for gold after the announcement of a long-term downgrade to the US government from 'AAA'. ' down to 'AA+' of Fitch Ratings.
Analysts note that the US dollar and bond yields have benefited from the flow of safe-haven assets. 10-year bond yield has rebounded above 4%; Meanwhile, the US dollar index is trading at a four-week high (above 102 points).
In the face of these headwinds, gold prices have dropped to a three-week low and are testing key support.
“The downgrade surprised many traders when the market reached an overvalued level,” said Michele Schneider, director of trading education and research at MarketGauge. If there is a liquidity crunch, even gold could be hit harder.”
While gold investors may see volatility in the near-term, analysts have said it may only be a matter of time before investors will consider gold a store of value again. essential assets as America's growing debt becomes a greater fear.
Analysts note that the US dollar and bond yields have benefited from the flow of safe-haven assets. 10-year bond yield has rebounded above 4%; Meanwhile, the US dollar index is trading at a four-week high (above 102 points).
In the face of these headwinds, gold prices have dropped to a three-week low and are testing key support.
“The downgrade surprised many traders when the market reached an overvalued level,” said Michele Schneider, director of trading education and research at MarketGauge. If there is a liquidity crunch, even gold could be hit harder.”
While gold investors may see volatility in the near-term, analysts have said it may only be a matter of time before investors will consider gold a store of value again. essential assets as America's growing debt becomes a greater fear.
✅ TP1: 1935
✅ TP2: 1942
❌ SL: 1919