International gold prices experienced their biggest one-day drop since February last year, as the rally came to a halt after five consecutive weeks of gains. On April 22, gold prices plunged nearly 3%, dropping below the $2,350 mark. The decline continued on April 23, with spot gold falling below $2,300 per ounce. Analysts raised doubts about whether the gold rally has stalled and if a larger correction is on the horizon.
The drop in gold prices was attributed to several factors, including the easing of geopolitical tensions leading to a decrease in risk aversion and insufficient U.S. inflation to support a Federal Reserve interest rate cut. Additionally, financial institutions implemented measures such as increasing margins to curb overheated speculation in the market.
Experts believe that a correction in gold prices was inevitable after reaching new highs, but the foundation for a continued rise remains solid. The potential for a Federal Reserve interest rate cut later in the year could provide new opportunities for gold investments. Global central banks’ strong demand for gold purchases also continues to support prices.
As the May Day holiday approaches and the external environment remains complex, the volatility in the gold market is expected to increase. Risk management measures in the Shanghai gold futures market have been reinforced to maintain market stability.
Looking ahead, changes in expectations for a Federal Reserve interest rate cut remain a key factor influencing gold prices. While short-term consolidation may occur, analysts remain optimistic about the long-term investment value of gold. The continuous rise in gold prices may have led to a temporary divergence from fundamentals, but expectations of a potential interest rate cut by the Federal Reserve in the future could provide support for gold prices.
Investors are advised to stay informed and cautious in their investment decisions, as market conditions continue to evolve. The Securities Times emphasizes the importance of seeking accurate information and making informed decisions when it comes to investment strategies.