TechFlow, Oct 21 — According to Jinshi Data, institutional analysis indicates that after several consecutive weeks of sharp gains pushing technical indicators into overbought territory, gold prices recorded their largest single-day drop in four years.
After hitting a record high of $4,381.52 per ounce on Monday, gold plunged 3.8% on Tuesday, falling below $4,190 per ounce. Indicators such as the Relative Strength Index (RSI) suggest the recent aggressive rally had entered deeply overbought levels. A stronger U.S. dollar further increased the cost of dollar-denominated precious metals for most buyers.
Risk-hedging demand for precious metals has cooled as trade tensions ease and India's seasonal buying spree comes to an end. Ole Hansen, commodity strategist at Saxo Bank, noted: "In recent trading sessions, an increasing number of traders have started to watch out for correction risks. Markets demonstrate their true strength during adjustments, and this time is no exception—underlying buying interest may help limit further downside."
