International gold prices experienced a significant correction after weeks of continuous gains, causing concern among traders and investors. On April 22, gold prices dropped nearly 3% to below $2,350 per ounce, marking the largest single-day decline since February of the previous year. This decline continued on April 23, with spot gold falling below $2,300 per ounce. This 3.3% drop in just two days has sparked discussions about whether the gold rally has stalled and if a larger correction is on the horizon.
Several factors have been cited for the sudden drop in gold prices. First, the easing of geopolitical tensions has reduced risk aversion in the market. Second, the decline in U.S. inflation is not substantial enough to support the Federal Reserve’s interest rate cut. Additionally, some exchanges have implemented measures such as increasing margins to curb excessive speculation in the market, leading to profit-taking and market exits.
Experts believe that a correction in gold prices was inevitable after reaching new highs, but the long-term outlook remains positive. The Federal Reserve’s interest rate cut expectations could change, creating new opportunities for precious metals. The global central bank’s strong demand for gold purchases is also expected to drive prices higher.
As the May Day holiday approaches and global uncertainties persist, the gold market’s volatility may increase. The Shanghai gold futures market has also enhanced risk control measures to maintain market stability.
Although short-term consolidation may continue, most analysts remain optimistic about the long-term investment value of gold. The potential for a U.S. interest rate cut and geopolitical risks are expected to support gold prices in the medium to long term. Global central banks, including China’s, continue to increase gold reserves, signaling confidence in the precious metal’s value for long-term asset allocation.
Overall, while recent corrections in gold prices have caused fluctuations in the market, experts believe that the underlying factors supporting gold’s rise remain intact. As uncertainties persist and global economic conditions evolve, gold is expected to maintain its value as a safe-haven asset and investment opportunity in the coming months.