Biggest Decline In Almost Two Years

Gold is 1% lower in the Asia-Pacific session, after tumbling 2.7% to $2327.30 on Monday. This was the largest decline in almost two years.

• The yellow metal is now at its lowest level in a week, as geopolitical tensions in the Middle East ease.
• The move was not isolated to gold, with silver off by around 5% on the day, leaving it approximately 9% lower than the April high. As a result, the gold/silver ratio is back above the 200-dma, after dipping below earlier in the month.
• Bloomberg reports that bullion’s 16% YTD gain through last Friday could spur some reserve managers to consider slowing down their purchases should gold struggle to retain its mojo. The same mindset could affect Chinese savers who have been a notable source of demand.
• According to MNI’s technicals team, the trend condition in gold is unchanged and the outlook remains bullish, with sights on $2452.5, a Fibonacci projection, on the upside. Initial firm support is at $2310.2, the 20-day EMA.