The sharp drop in gold prices this year may worry many investors, but Mr. Jeff Clark - The Gold Advisor publisher believes that the precious metal is still in a large upward cycle and the current correction is very similar to periods of volatility that have appeared in history.
According to Kitco News, Mr. Jeff Clark said that the current diễn biến of the gold market has a high correlation with the strong gold price increase cycle in the late 1970s - the period when the precious metal once fell deeply before recovering strongly.
According to him, strong declines in a rising market are not uncommon phenomena but often appear before the upward trend returns.
In the previous cycle, gold also fell sharply and then quickly recovered. What is happening now has many similarities," he said.
This view is expressed in the context that gold prices have fallen more than 20% since the peak of nearly 5,600 USD/ounce in January. However, according to Jeff Clark, the current adjustment is still much lower than the period of strong fluctuations that have appeared in the history of the gold market.
However, not all experts are positive in the short term. Mr. Ole Hansen - Commodity Strategy Director at Saxo Bank believes that gold may still face additional adjustment pressure after losing some important technical milestones.
According to Mr. Hansen, the 4,100 - 4,075 USD/ounce zone is becoming a noteworthy support threshold for the market in the short term. However, Saxo Bank experts also believe that the foundational factors supporting gold such as the central bank's reserve demand and the asset defense role have not changed.
Short-term pressure remains, but that does not mean that the long-term outlook for gold has changed," he said.
From a longer-term perspective, Jeff Clark believes that compared to previous cycles, the current upward trend of gold still has room in the coming years. According to him, the current correction can be seen as an accumulation opportunity rather than a signal that the upward trend has ended.
Besides short-term fluctuations, Mr. Clark assessed that the foundational factors supporting gold are still maintained, notably the need to diversify assets, the gold accumulation trend of central banks and the role of precious metals in preserving value.
Although the market is still volatile, I still maintain a positive outlook for gold in the long term," he said.
According to Jeff Clark, the current decline is likely a necessary correction phase after a period of strong increase, instead of a sign that the gold market has entered a long-term downward trend.
