Gold and Silver Plunge: Dramatic Market Shift Unfolds Now

URGENT UPDATE: A dramatic shift in precious metals prices has just occurred as gold and silver experience significant declines today, October 21, 2023. After months of steady gains, gold has plunged $233 or -5.35%, bringing its price down to $4,121.45—the largest one-day drop since August 11, 2020.

This sudden reversal comes after gold reached an astounding all-time high of $4,381.48 just yesterday, marking a 67% increase for the year. The market is reacting sharply, as today’s decline pushes gold below its 200-hour moving average of $4,171.17, now seen as a crucial resistance level. Analysts warn that if gold drops below $4,059, further selling pressure could ensue. Conversely, a rebound above the 200-hour MA could target the 100-hour moving average near $4,267.

Silver also tumbled today, falling $3.90 or -7.43% to $48.53. This marks the largest one-day decline since February 2021, despite silver maintaining a year-to-date increase of 68.9%. The sharp drop follows a high of $52.60 earlier in the session, leading to concerns among investors.

In the foreign exchange market, the USDJPY surged approximately 0.78% today, following the announcement that Sanae Takaichi has become Japan’s first female Prime Minister. Although markets initially welcomed her dovish stance, emphasizing fiscal stimulus, Takaichi affirmed that there is no need to review the Bank of Japan’s monetary policy accord, keeping decisions firmly with the BoJ. The USDJPY pair broke above both the 100-hour MA of 150.819 and the 200-hour MA of 151.46, peaking at 152.17 before retreating to around 151.89.

Elsewhere, the U.S. dollar strengthened against most major currencies, except the Canadian dollar, which received a boost from CPI data that came in slightly hotter than expected. This contributed to a -0.10% decline in the USDCAD.

Geopolitical sentiment is also shifting, with the highly anticipated meeting between Vladimir Putin and Donald Trump in Budapest postponed indefinitely. Speculation is rising around Trump’s planned summit with China’s President Xi Jinping, which he suggested may not occur as well.

In the equities market, U.S. stocks are showing mixed results. The Dow Jones Industrial Average gained momentum thanks to strong earnings from 3M (+7%) and Coca-Cola (+3.8%), while the S&P 500 finished flat and the Nasdaq Composite dipped slightly by -0.16%. In the U.S. debt market, yields have decreased, contributing to a flatter yield curve.

As this situation continues to develop, investors and market watchers should remain vigilant for further updates. The immediate future of both gold and silver will depend on how buyers and sellers react to these significant shifts in market dynamics.