Gold prices are experiencing one of the strongest fluctuations in many years, as the market is also affected by energy shocks, tight monetary policy and global capital shifts. This week, the precious metal is heading for its deepest decline in 6 years, but behind the short-term decline are long-term forecasts full of differentiation from major organizations.
In the last session of the week, gold traded around 4,725.69 USD/ounce, down nearly 7% in the week. The main pressure came from the soaring oil and gas prices due to the Middle East conflict, followed by concerns about inflation returning. When inflation increased but the central bank could not ease, real interest rates remained at a high level, becoming a major obstacle for gold.
Not only macroeconomic factors, cash flow is also turning its back on precious metals. US bond yields and the strong increase in the USD have caused gold to lose a relative advantage. Global gold ETFs have recorded a net withdrawal of more than 60 tons in just three weeks, wiping out accumulated earnings from the beginning of the year. At the same time, investors are forced to sell gold to cover losses in other markets, creating a typical "cross-selling" effect during periods of financial stress.
However, it is noteworthy that the current decline does not significantly change the long-term perspective of many large financial institutions.
Analysts at UBS still maintain a positive view, forecasting gold prices may reach the 5,900-6,200 USD/ounce range in the next cycle. According to UBS, the main driving force is not in mere geopolitical conflicts, but in structural risks such as high public debt, the trend of dedollarization and the demand for gold reserves from central banks.
Meanwhile, Goldman Sachs has also repeatedly emphasized that gold is entering a "new structural cycle", in which the role of the central bank is a key factor. Persistent buying power from this sector helps create a "floor price" for gold, even when speculative cash flow withdraws.
From a more cautious perspective, experts from Bloomberg Intelligence and some investment funds believe that gold may continue to fluctuate widely in the short term, even not excluding the possibility of a deeper decline if interest rates remain at a high level longer than expected. Some technical scenarios show that the 4,600 USD/ounce zone may even be challenged if selling pressure continues.
However, many experts say that the market is entering a "revaluation" phase, instead of reversing the long-term trend. When the RSI index falls to the oversold zone and speculative positions are sharply narrowed, the possibility of technical recovery is relatively high.
Notably, physical demand in Asia, especially China and India, remains stable. This is a fundamental factor helping to limit the deep decline of gold prices, in the context of strong financial fluctuations.
Overall, the gold market is being caught between two opposing pulling forces. One side is a high interest rate environment, a strong USD and inflationary pressure from energy. The other side is prolonged geopolitical risks, increased global public debt and the need to diversify reserve assets.
In the short term, gold is likely to continue to fluctuate strongly and lack clear trends. But in the medium and long term, most large organizations have not given up on the price increase scenario, considering gold as one of the most important defensive assets against the growing incertitudes of the global economy.
