Commodity experts have been warning that gold’s climb to over $2,400 has made the market risky, but they also say that if the market corrects, it could be a chance to buy.
Gold is having a big drop at the beginning of the week, but some experts think we shouldn’t panic. Even though gold is down over 2%, it seems to be staying around $2,350 an ounce, which is a level where it might find some support.
Gold futures for June are currently at $2,348.60 an ounce, down 2.7% for the day. But even with this drop, gold is still up about 17.5% since February when it was around $2,000.
Silver is also seeing a big drop, falling below $28 an ounce. May silver futures are at $27.525 an ounce, down 4.6% for the day.
Some experts think gold could still drop more as people focus on what the U.S. Federal Reserve might do with interest rates. Right now, the chances of a rate cut in June are only 16%, and less than 50% for July.
Ricardo Evangelista, a senior analyst, says gold is caught between people wanting safe investments and others being more confident in the U.S. economy. If the tension in the Middle East eases and the U.S. economy stays strong, gold prices might drop more as traders take their profits.
But even with possible drops, experts say the reasons for gold’s rally in March are still there. Central banks are still buying gold to protect against high debt and a weak dollar. And Asian investors are still buying gold to balance their investments.
Nicky Shiels, a metals expert, thinks gold might drop more in the short term, but she still believes it could reach $2,500 an ounce eventually.
David Morrison, a senior analyst, thinks gold prices might go down more, but he says that when gold has dropped before, it’s usually been a good time to buy.
Carley Garner, who co-founded a trading firm, believes that if gold drops to around $2,330 or $2,300, it could be a good opportunity for people who missed out on the earlier rally. She thinks gold could go up to $2,650 an ounce in the future.
Chantelle Schieven, who researches at Capitalight, had the most optimistic prediction for gold this year. She thinks gold might drop to $2,150 this summer but could rise above $2,500 by the end of the year, up from her previous guess of $2,400.
Experts are looking at different levels to see where gold might go next. Ole Hansen from Saxo Bank is watching levels like $2,322, $2,288, and $2,255.
Even though gold has dropped a lot, some experts say many investors are still holding onto their gains, so they’re not in a rush to sell.
A commodity analyst at TD Securities says that while gold prices are high, there might not be a lot of people wanting to sell right now. They say big investors haven’t bought a lot of gold recently, so there’s not much risk of a big sell-off.
