Gold prices have been on a turbulent journey, marked by volatility influenced by shifting geopolitical landscapes and overall market sentiment.
The precious metal has corrected from its all-time high of $2,431 as the market awaits the next trajectory amidst short-term fluctuations.
However, in an X (formerly Twitter) post on April 23, analysts at Gold Predictor emphasized the significance of corrections in the gold market, presenting an opportunity for investors.
According to the analysis, the correction, deemed necessary due to gold’s short-term overbought status, is anticipated to bring prices down to at least $2,285. Nevertheless, this correction does not alter gold’s bullish overall price structure.
Moreover, the analysis underscores the potential for investors to enter the market at favorable levels during corrections, with both the long-term and medium-term outlooks remaining unchanged.
“This correction does not alter the long-term and medium-term outlooks. Such corrections provide an excellent opportunity for investors to enter at favorable levels,” the experts said.
Why gold is correcting
Gold is facing pressure when the stock market opened the week higher, diminishing demand for safe-haven commodities such as gold. Currently, attention is on the upcoming U.S. personal consumption expenditures (PCE) report for indications of potential U.S. interest rate adjustments and their potential impact on the precious metal.
In particular, gold could approach its all-time highs if the PCE report unexpectedly indicates a cooling in inflation.
Overall, recent geopolitical developments, notably Iran’s indication of no plans for retaliation against Israeli missile strikes, have contributed to a reduction in tensions in the Middle East. This relaxation in geopolitical tensions has dampened demand for safe-haven assets, leading to downward pressure on prices.
Investors also appear to have cooled down their expectations regarding the Federal Reserve’s monetary policy, with interest rate adjustments seemingly pushed to later in 2024 amid stubborn inflation.
Indeed, as the focus shifts to the spot gold price, a recent report by Finbold indicated that central banks globally have been accumulating the precious metal at historically high rates. This accumulation has drawn attention to the strength of currencies amidst these acquisitions.
In the meantime, gold is $2,320.70, having dropped by approximately 0.205% in the last 24 hours.
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