On Kitco, the analysis group of CPM Group has just issued a recommendation to buy gold again, with a price target of 5,000 USD/ounce before March 31 and a cut-loss level of 4,400 USD/ounce.
According to this group, gold prices fell to 4,505 USD/ounce at the end of last week, from 5,003.59 USD/ounce recorded on Monday (March 16) - the time this unit issued the closest trading recommendation.
The previous recommendation was to sell with a target of 4,850 USD/ounce, about 250 USD lower than the price at the beginning of the week" - experts said.
Although the downward trend is still present, CPM Group believes that the probability of short-term recovery is higher than the risk of price decrease. "Gold prices may continue to adjust to 4,300 USD/ounce, 4,200 USD/ounce, even 4,000 USD/ounce, but increasing negative political and economic factors are supporting the possibility of recovery to 5,000 USD/ounce in the next two weeks" - the report stated.
Notably, the analysis team emphasized that geopolitical developments are key factors supporting gold prices. The prolonged conflict between the US, Israel and Iran, the risk of blockading the Strait of Hormuz, and attacks on oil and gas facilities in the Persian Gulf region are increasing safe haven demand.
In addition, the fact that many countries do not support US military action also contributes to making the global environment more unstable, thereby promoting gold demand in both the short and long term.
Meanwhile, according to Mr. Jim Wyckoff - senior analyst at Kitco, the gold market has just experienced its worst week in 6 years. The main reason comes from the Middle East war pushing energy prices up, while reducing expectations of central banks early cutting interest rates.
Gold prices have been falling continuously every week since the US and Israel attacked Iran last month" - Mr. Wyckoff said. However, he also noted that despite recent declines, gold prices have still increased by about 8% since the beginning of the year. Some experts believe that the current decline may stimulate central banks to increase gold buying again.
Technically, the important resistance level of gold is currently at 5,000 USD/ounce. Meanwhile, sellers are aiming to pull prices below the support level of 4,423 USD/ounce. The nearest support levels are determined at 4,600 USD/ounce and 4,505 USD/ounce.
From a macro perspective, Mr. Michael Brown - senior research strategist at Pepperstone - warned that central banks focusing too much on controlling inflation could lead to policy mistakes, especially in the context of a global economy showing signs of weakening.
According to him, monetary policy is not an effective tool to deal with inflation due to supply factors, but mainly reduces growth to restrain demand. Therefore, tightening policies in this period may increase the risk of recession.
In the context of many uncertainties surrounding the Iranian conflict, it is reasonable for central banks to choose to "wait and see" - Mr. Brown said.
However, he also believes that if policy mistakes occur, gold prices may increase sharply in the long term as investors turn to safe-haven assets to hedge against growth decline risks.
In general, experts believe that the long-term upward trend of gold has not ended, but the market needs a period of accumulation before forming clearer buying opportunities when prices adjust.
In the coming week, when the economic data release schedule is relatively sparse, investors are forecast to continue to focus on monitoring geopolitical developments and the risk environment that central banks are facing.
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