Gold logs worst weekly fall in 40 years, experts see buying opportunity for long-term investors

NEW DELHI: Gold prices have witnessed a sharp decline since last week, marking the worst weekly fall in the past 40 years, with prices dropping to $4,354 per ounce. The precious metal has fallen significantly from around $5,200 per ounce on March 13 to $4,354 per ounce by March 23, reflecting a steep correction in a short span.

Gold, which had earlier touched an all-time high of 5,595.51, has now come under pressure amid changing global market dynamics. Market experts noted that despite ongoing geopolitical tensions, gold has failed to sustain its traditional safe-haven appeal in the current environment.

According to a report by The Wall Street Journal, the recent pullback in gold prices may offer opportunities for long-term investors. Phillip Nova’s senior market analyst, Priyanka Sachdeva told WSJ that gold’s ongoing correction could provide “staggered” long-term accumulation opportunities at lower levels.

The report noted that the fall below $4,400 per ounce has “opened the door” to the 200-day moving average of $4,154 per ounce, which is emerging as a potential downside target before prices stabilise. “This correction is a golden opportunity for staggered entry by long-term buyers”, the analyst told WSJ.

Data from ICE showed that spot gold was 2.0 per cent lower at $4,400.44 per ounce after earlier touching $4,320.08 per ounce, the lowest intraday level since early January. The report also highlighted that gold prices edged lower amid prospects of liquidity-driven selling in global markets during the ongoing Middle East conflict.

Saxo Bank’s Head of Commodity Strategy, Ole Hansen told WSJ, that speculation is emerging that some economies may need to raise liquidity, potentially including gold sales. “While not a confirmed driver, it adds to the more cautious tone”, Hansen said.

He added that gold’s inability to rally despite geopolitical stress indicates that other factors are currently dominating the market. “Gold’s failure to rally despite geopolitical stress highlights the current dominance of higher real yields, a firmer dollar and position adjustment over its traditional safe-haven role”, he said.

Overall, analysts suggest that while gold prices have corrected sharply, the current levels may present selective buying opportunities for long-term investors even as near-term volatility persists. (ANI)