Gold prices are currently near all-time highs, but experts warn that a drop in prices could lead to significant selling. If the Gold price drop, $2,490 gold level, gold market risks below $2,490 per ounce, it could trigger a major sell-off. According to Daniel Ghali, a Senior Commodity Strategist at TD Securities (TDS), this price level is critical for the market, especially for traders who follow trends.
Why a Drop Below $2,490 Matters
If gold drops below $2,490, it could lead to many traders selling their positions. This could result in up to 25% of long positions being sold off. In simple terms, this means that a lot of people who are currently betting on gold prices going up may decide to sell if prices fall below this key level.
This sell-off could also encourage other traders to sell, leading to a chain reaction that could push prices down further. Even small changes in price can have big effects in such a highly sensitive market.
Market Positions are at Extreme Levels
The market is currently positioned at levels not seen since major events like the Brexit vote in 2016, the “stealth QE” in 2019, and the COVID-19 pandemic in 2020. These were times of high uncertainty, and we are seeing similar market behaviors now.
One of the risks is the upcoming U.S. election. If former President Trump wins, it could strengthen the U.S. dollar and push gold price drop. Investors need to be aware of these risks when considering their positions.
What Could Happen Next?
If gold falls below $2,490 per ounce, we could see a large number of traders selling their positions. This could lead to even more selling and a drop in gold prices. The combination of election uncertainty and extreme market positioning makes the market more vulnerable to big changes.
To stay updated on gold price movements, check out the Daily Gold Update. For more insights into the gold market, visit Daily Gold Signal.
