Gold prices may see a sharp correction - Commodities News | The Financial Express
Gold recently made history by breaching the $4,000 per ounce mark — and in India, the metal has surged some 37.5% during this financial year. While market enthusiasm and safe-haven demand have powered this ascent, analysts warn that the rapid rally may not be sustainable in the short run. Key triggers that could prompt a pullback include a stronger US dollar, rising bond yields, and a possible resolution of the US government shutdown. Technical indicators also hint at overbought conditions, suggesting that a 10-15% correction may be “healthy” for the market. Still, many experts believe the longer-term outlook remains positive, citing underlying structural demand and momentum. For now, investors are watching closely for signs of profit-booking or consolidation after a frothy rally.
The Key points
- Gold has crossed $4,000/ounce globally, driving investor interest.
- In India, the rally has outpaced international gains this financial year.
- The US dollar trading near two-month highs could trigger downside pressure.
- A US fiscal resolution may reduce safe-haven demand.
- Bond yields rising in France and Japan are additional headwinds.
- Technicals suggest overbought conditions in gold markets.
- Analysts point to a 10–15% pullback as a realistic range.
- Silver may move more violently — perhaps 1.7× the magnitude of gold’s swings.
- Long-term structural bullishness, driven by demand, still holds.
- A correction may offer a favorable entry point for long-term investors.
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