Gold price turns downward. Experts: There is still room for correction in the second quarter

The price of gold, which had been soaring upward in the past few days, suddenly stalled and turned downward. Looking at the gold price of branded jewelry, data from Jintou.com shows that the gold price of Chow Tai Fook jewelry reached a current high of 737 yuan/gram on April 16. As of April 24, it has fallen back to 715 yuan/gram, which is equivalent to a price reduction of 1 gram of gold. 22 yuan.

Similarly, the international gold price has also seen a significant correction in recent days. Wind data shows that on April 12, the spot price of London gold once again hit a historical high, reaching $2,431.780 per ounce, but the price did not climb upward. It fell 1.21% overall that day, closing at $2,343.285 per ounce. In the eight trading days from April 12 to April 23, gold prices closed lower on five trading days. Among them, on April 22, its price fell by 2.72%, the largest decline in the past two years.

Why did the price of gold suddenly drop? Liu Siyuan, chief analyst of Linkshow Finance, said in an interview with a reporter from Securities Daily that this was caused by three reasons. First, profit orders that had risen excessively in the early stage were being cashed out and shipped, causing market selling to suppress prices; secondly, strong U.S. inflation forced the Federal Reserve to postpone the opening of the interest rate cut window again, and the rebound of the U.S. dollar index further suppressed gold prices; finally, international geopolitical conflicts have Eased, releasing risk aversion and slowing down short-term gold demand.

"Speculative sentiment in the gold market has weakened recently, and profit-taking from early investments may also be one of the reasons for the fall in gold prices." Liu Chunsheng, associate professor at Central University of Finance and Economics, said in an interview with a reporter from Securities Daily.

So, does the fall in gold prices in recent days mean the beginning of a downward trend? Liu Siyuan said that from a fundamental point of view, the failure of the Federal Reserve's expected rate cut in June, coupled with the departure of high profit taking, will exert continuous pressure on gold prices. There is still room for a correction in gold prices in the second quarter, and attention should be paid to opportunities to push back on support around $2,200 per ounce.

However, he also said: "Although the early high gold prices have reduced the amount of gold purchased by central banks around the world, the long-term purchase intention still exists, so the demand for gold spot purchases still provides support for long-term gold prices."

A special report released by Tongguan Jinyuan Futures on April 23 believes that the current price of precious metals is already in a phased correction, and short-term adjustments are expected to continue. Among them, the reference support below the international gold price is between US$2,150/ounce and US$2,200/ounce. ounce.

The report believes that in the medium term, the U.S. government debt problem will become increasingly severe under high interest rates. Although expectations of the Fed's interest rate cuts have been repeatedly postponed, the general direction of the Fed's interest rate cuts is certain. Before the interest rate cut is implemented, it is expected that the market will continue to rush forward with expectations of interest rate cuts, and precious metals will still have upward momentum. In the long term, under the background of "de-dollarization" and other backgrounds, gold's monetary attributes are returning. Global central banks continue to increase gold reserves, and safe-haven demand amid frequent international geopolitical conflicts will support gold demand. We continue to be optimistic about the long-term long-term allocation value of precious metals.

For investors, Liu Siyuan suggested that investors who have made profits in the early stage can gradually cash in their profits and wait for entry opportunities after a deep correction.

Liu Chunsheng believes that for long-term investors, gold, as a safe-haven asset, can play a stabilizer role in the investment portfolio. However, investors also need to pay attention to the volatility and uncertainty of the gold market and avoid blindly chasing highs or buying lows.