Gold price well off its lows - Twitterverse sees drop below $1,700 as a buying opportunity

The price action in the gold market has turned from bad to worst as the precious metal dropped to a new low for the year at the start of the Asian trading session.

However, some analysts see the price action as a major buying opportunity as they expect central banks will be slow to tighten monetary policy.

December gold futures lost nearly $100 as Asian markets started to open up. Although the precious metal is well off its lows, it is still seeing some selling pressure. December gold futures last traded at $1,742.40 an ounce, down 1.17% on the day.

Since Friday morning, gold prices have lost $76, one of their biggest losses since markets were first roiled by the COVID-19 pandemic in early 2020. Better-than-expected employment data sparked the latest selloff in gold.

Friday, the U.S. Labor Department said that 943,000 jobs were created in July, handily beating consensus expectations of 870,000 jobs. At the same time, the unemployment rate fell to 5.4%, down from 5.9% in June. Wages also rose more than expected in July.

After gold's drop below initial support at $1,790 an ounce, many analysts said that gold could test major support at $1,690 an ounce. However, many weren't expecting that target to be reached by Sunday.

Some analysts have said that Sunday's major selloff was due to a massive sell order executed in a low volume environment.

"I think the idea that interest rates might have bottomed is causing some to want to dump their inflation bets in metals, which has led in Sunday evening thin trade to a washout," said Ira Epstein, director of Ira Epstein Division of Linn and Associates, in a note Sunday evening. "It looks like a firm doing a blowout of trade due to margin along with very thin trade volume is behind this."

According to comments on Twitter, many analysts see gold's drop as a significant buying opportunity.

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