Gold prices crash: Yellow metal registers worst weekly fall in 40 years, what should investors do?
As tensions in the Middle East stretch into their fourth week, shockwaves are now being felt across global markets and gold is no exception. The precious metal has taken a sharp hit, tumbling to its steepest weekly fall in nearly four decades, with prices reaching $4,354 per ounce.The fall marks a swift retreat from levels of around $5,200 per ounce seen on March 13, highlighting the speed and scale of the correction. The metal had earlier surged to an all-time high of $5,595.51 before losing momentum.The sharp decline is raising concerns about gold’s traditional safe-haven status. Market participants note that despite ongoing geopolitical tensions, the yellow metal has struggled to hold its appeal, with broader financial factors taking centre stage.Gold prices fallAccording to a report by The Wall Street Journal, the recent decline may open up opportunities for long-term investors looking to enter the market at lower levels.Priyanka Sachdeva told WSJ “this correction is a golden opportunity for staggered entry by long-term buyers,” she said.The report added that a sustained move below $4,400 per ounce has brought the 200-day moving average of $4,154 per ounce into view as a potential support level before any stabilisation.Data from ICE showed spot gold trading 2.0% lower at $4,400.44 per ounce, after touching an intraday low of $4,320.08, its weakest level since early January.The downturn has also been linked to expectations of liquidity-driven selling in global markets amid the ongoing Middle East conflict. Gold proceeds with a ‘cautious tone’Ole Hansen, Saxo Bank’s Head of Commodity Strategy, told WSJ that there is speculation some economies may need to raise liquidity, which could include selling gold.“While not a confirmed driver, it adds to the more cautious tone,” he said.He further noted that gold’s inability to rally despite geopolitical tensions suggests other factors are currently dominating market behaviour.“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.Analysts broadly indicate that while the correction has been sharp, the current price levels may still present selective buying opportunities for investors with a long-term perspective, even as short-term volatility continues.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
