Gold prices have been volatile for the past 2-3 sessions, down nearly $300 from the all-time high seen in the previous year.
Speaking to CNBC-TV18, Ron William, Market Strategist at RW Advisory, said, “From a behavioral trend perspective, gold has been unwinding from extreme historic highs. We have been in a consolidation pattern for some time now in a multi month range."
"On the short term we have broken the lower side of that range – the number is at $1,760, likely technical support at $1,690 and $1,665. But essentially this could either be a short term correction which can be overdone in a matter of time as part of a long term buying opportunity both in absolute and relative terms.”
However, he said that the US stimulus package will determine whether gold as an asset is a safe haven or not.
“From an event perspective, the reaction to stimulus coming out later this week will give an opportunity to see whether gold will be behaving as a safe haven asset i.e. hedging some of this currency risk or whether it will also be building up some steam along with its commodity complex,” he said.
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