Experts lose confidence, gold price decline may last

In the weekly gold survey of Kitco News, the optimistic sentiment among analysts and retail investors has decreased sharply.

Adrian Day - Chairman of Adrian Day Asset Management - said that gold prices may continue to adjust down due to profit-taking activities, but this decrease is not a concern. "Gold has gained 12% this year but has only fallen less than 4% since the peak. This is just a temporary correction," he said.

Marc Chandler - CEO of Bannockburn Global Forex - agreed with the above view when he said that gold prices may continue to decline in the short term. "Gold set a record on February 24 at $2,956 an ounce but was later sold off. Gold is showing signs of trading as a risky asset rather than a safe-haven asset," Chandler analyzed.

According to this expert, the next support level for gold could be at 2,814 USD/ounce, if it breaks this level, the price could fall to 2,770 USD/ounce.

Meanwhile, Darin Newsom - senior analyst at Barchart.com - said that technically, gold could form a reversal pattern on the weekly chart. "Even the biggest markets need time to adjust and perhaps it will be gold next week," he said.

Daniel Pavilonis - senior commodity broker at RJO Futures - commented that the recent decline in gold prices is related to the "risk-off" mentality in the financial market. "Stock and gold markets are both falling, while US bond yields are also cooling. This shows that cash flow is shifting away from risky assets," he explained.

Pavilonis said that the important support level for gold is currently at 2,600 USD/ounce, corresponding to the 200-day moving average. "If the S&P 500 falls below 5,700 points, gold could adjust to the $2,600/ounce zone before finding a balance," he warned.

According to Adam Button - Head of Foreign Exchange Strategy at Forexlive.com, gold prices may continue to decrease as cash flow in China is shifting from gold to stocks in the context of the economy having prospects for recovery.

Everett Millman - an analyst at Gainesville Coins - said that this price drop is a healthy adjustment after a series of strong increases since the beginning of the year. "Before this week, gold prices were almost just rising. Adjustment is normal, especially when speculative cash flow is taking profits and waiting for new points," he said.

However, Millman remains optimistic about the long-term outlook for gold. He said that $3,000/ounce could soon be established as a new support zone if gold prices conquer this mark.

Notably, Jim Wyckoff - senior analyst at Kitco - warned that the gold market is lacking new positive information to maintain the upward momentum. "A bull market needs to be continuously fueled by positive news. Recently, the gold market has lacked these factors," he said.