The plummeting gold price does not mean the increase has ended

Gold's eight-week streak of gains has come to an end as the precious metal sees its biggest decline since the November election.

After hitting a new record high of over $2,970/ounce, gold prices have continuously declined, hitting a three-week low. The April gold contract is currently trading at $2,850/ounce, down more than 1.5% on the day and down more than 3% compared to last Friday.

Although the decrease was quite strong, many experts said that this fluctuation was not too surprising because gold was overbought as investors pushed the price closer to 3,000 USD/ounce.

Ole Hansen - head of Commodity Strategy at Saxo Bank - described this decrease as a necessary adjustment. He predicted that gold could test the support level around $2,800/ounce, while silver prices are likely to fall below $31/ounce.

Cilliber prices typically follow gold but at a faster pace. The key Fibonacci levels to watch are 31.08 and 30.54 USD, with the later levels also matching the 200-day moving average. Overall, it is a healthy correction before gold moves to $3,000 an ounce and silver targets a high of $30 an ounce, Hansen said.

Despite the decline in prices, many experts believe that selling pressure has not caused significant technical damage to gold.

This is still a normal correction and I am not worried, said Jess Colombo, an independent precious metals analyst and founder of BubbleBubble Report.

Gold could retest to support $2,800 an ounce a high in late October. If prices close below $2,800/ounce, I will have a more cautious view of gold mining stocks and short-term trading positions, but not affecting the physical gold I hold, said Jess Colombo.

Colombo also said it is difficult to have a negative view of gold in the context of continued inflation and a weakening of the US economy.

The latest testament to economic risks is the Atlanta Federal Reserve's GDP Forecast. The regional central bank expects the US economy to shrink by 1.5% in the first quarter of this year, compared to the 2.3% growth it forecast last week.

In addition, gold is still supported as a safe haven asset when the US presidential administration of Donald Trump announced a 25% tax on imports from Canada and Mexico, and a 10% tax on goods from China from March 4. The move could lead to a trade war as Canada and Mexico prepare retaliatory measures.

Kelvin Wong - senior analyst at OANDA - predicted that gold will continue its long-term uptrend despite a short-term correction. He said the key support level to watch is $2,716 an ounce.

If prices close below this level, gold could enter a deep correction phase that will last for several months. The current decline from the record high on Monday is likely to be an adjustment in just a few weeks as net speculative buying positions in the futures market are gradually being cut, said Wong.

Wong further emphasized that if economic data continues to deteriorate, gold will be further supported as a safe asset.

Next week, the February non-farm payroll report will help the market assess the health of the US labor market. Investors are also monitoring the manufacturing and service PMI.

In addition, the monetary policy decision of the European Central Bank (ECB) will be of interest. The ECB is expected to continue cutting interest rates, which could support the USD and put pressure on gold prices.