Gold prices fell despite the global stock market witnessing a strong sell-off. December gold futures fell 11.3 USD to 4,002.8 USD/ounce, while December silver futures lost 0.484 USD, to 47.57 USD/ounce.
Analysts believe that if US stock indexes continue to be under selling pressure in the main session, gold and silver prices may reverse to increase due to the psychology of avoiding increased risks in the market.
The global stock market fell sharply as Wall Street leaders warned that stock valuations were at too high a level. According to Bloomberg, investors are increasingly concerned about the risk of a bubble in the AI stock group, in the context that many executives of large financial groups believe that the market may face a correction of more than 10% in the next 12 to 24 months.
Capital Group Chairman and CEO Mike Gitlin recently commented that the company's profits are still solid, but the worrying problem lies in valuation. He said that most investors see stocks as being in the "reasonably high" zone, not as cheap. Gitlin also warned that the credit market is showing similar signs as the yield gap is narrowing significantly.
This assessment was shared by Morgan Stanley Ted Pick and Goldman Sachs leader David Solomon, who both believe that adjustments are a normal phenomenon in the market's movement cycle.
Another signal that shows increasing caution is the decline of Palantir technologies shares by about 3% in the after-hours trading session, even though the company has just announced business results beyond expectations.
Palantir raised its annual revenue forecast to $4.4 billion and reported Q3 revenue to $1.18 billion, up 63% year-on-year, with adjusted earnings reaching 21 cents per share. However, investors are concerned that stock valuations have been too high after a long series of increases.
In another development, Brazilian police in collaboration with Interpol are leading one of the largest campaigns ever to dismantle illegal gold mining in the Amazon River basin.
According to the AP news agency, the authorities have destroyed 277 sand dredgers used to mine gold along the madeira River, with a total estimated value of $6.8 million. When including seized gold, equipment and environmental damage, the total damage to the criminal networks is estimated at about 193 million USD.
In the US, the federal government shutdown continues into the new month, at risk of becoming the longest in history. According to AP, millions of people may lose food subsidies, while health aid is also about to expire.
President Donald Trump said on CBS's "60 Minutes" program that he would not give in to the demands of the Democrats, who wanted to resume negotiations on a health care package only after the government reopened.
Technically, December gold futures are under pressure to correct after a recent increase. The target for buyers is to maintain prices close above the resistance level of 4,100 USD/ounce, while the seller aims to pull prices below the strong support zone of 3,800 USD/ounce.
The most recent resistance level was determined at 4,043.1 USD/ounce and 4,059.9 USD, while support was 3,971.3 USD/ounce and 3,950 USD/ounce, respectively.
In outside markets, the USD index rose slightly, crude oil prices fell around $60/barrel, while the yield on the 10-year US Treasury note was at 4.09%.
Gold prices are currently traded mainly through two mechanisms: spot market for spot transactions and futures market for future deliveries. Due to the year-end liquidity factor, December gold futures are currently the most actively traded on the CME.
