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Rohan Saha
complicated Investor • 11d
Many people might think that the fall in gold prices is due to that research report, but let me clarify, that's not the case. Look, the reason behind gold's decline is something else. The biggest reason is profit booking, and the second reason is margin shortfall. When we traders hold any leveraged trade, we have to maintain a margin with the broker. When the market falls, we need to add more margin to keep our positions active. Now, since global markets are falling significantly, around 3%-5%, many traders or trading companies must have received margin shortfall notices. To maintain those margins, they likely converted their gold positions into cash. Additionally, there isn't enough demand for gold from Central Banks at the moment, which has also caused a slight correction in gold prices. But this doesn't mean that gold will drop to 56K. Personally, I don't believe in such predictions.
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