Gold and silver fall due to risk aversion, strong Dollar, Covid-19

Gold prices dropped relatively heavily on Monday. Risk aversion took over the market and held strong against the dollar index. Fears that the second wave of COVID-19 has already started in the US are growing. Furthermore, the economic data does not accompany it.

The dollar index is trading horizontally after rising in the early morning and hitting the day high at 97.40. However, the greenback lost momentum and returned to opening levels, around 97.10.

The market is very concerned about the disorderly reopening of economies around the world. 

The number of coronavirus cases has increased again

According to data from Hopkins University, the number of coronavirus cases continues to accelerate throughout the world. The United States has seen an increase in new patients every day.

The number of cases worldwide is already bordering on 8 million people in 188 countries. The death toll has already reached 434,000.

The United States continues to be the most affected country, with almost 2.1 million cases and more than 115 thousand deaths. The average number of confirmed diagnoses per day has risen again in the country.

The opposite is occurring in New Zealand, which reopened the rugby league and accepted the entry of 20,000 people to the Forsyth Barr Stadium in Dunedin. No social distancing applied, no masks, no measures were taken.

The country has been declared COVID-19 free after a rigid quarantine and the last coronavirus case has recovered.

Gold falls below 1,725

Gold is trading lower given the strength of the dollar and bad market sentiment.

The XAU/USD lost its $1.725 position and has been operating at lows since June 10 at $1.710. The prices dropped by 1.24% on the day.

The metal is currently testing the level that around $1.711. The chart is positioned lower and the $1.680 appears to be the next likely level.

Silver breaks below 17.25 and accelerates fall

Silver prices have been going down for the third consecutive trading day.

After opening below $17.50 and breaking the June 5 low at $17.22, the XAG/USD continued its decline and dropped to $17.10. The metal is currently trading at a 2.05% decline.

The silver chart is bearish and the chart pattern suggests further declines in the near term. $16.90 could act as support in the medium term.