Gold price breaks all records, is it time to take profits?

Precious metals have had a stellar start to the week. Spot gold is up more than 32% this year, despite geopolitical risks waning. So why is this happening, what can we expect next, and is it time to take profits?

There is no one-size-fits-all answer. Investment decisions should be based on individual goals and risk tolerance, not market fluctuations.

For example, short-term investors may want to lock in profits, or at least some of them. For long-term investors, holding may still be a good strategy. With the Fed cutting interest rates and current geopolitical tensions, the potential for gold to rise above $3,000 an ounce is there.

Meanwhile, other metals, including silver, could continue to rise. When it comes to copper, however, China’s economic stimulus needs to produce the desired results. But according to TradingView, that doesn’t look likely.

Despite the recently announced measures, analysts predict they will not be enough and that additional government intervention is needed. But Beijing appears to be in no rush to take that step.

In general, no market goes up without a correction. So even if there is a drop — up to 10% — there is no reason to panic and sell at a loss. Of course, this requires mental strength.

The outlook for precious metals remains quite bullish. It is important to note that events are proceeding as planned, especially with regard to the US Federal Reserve’s policy.

For example, if the rate-cutting cycle is adjusted down on extremely upbeat economic data and prices rise, interest in gold could decline, dragging gold prices down. A dovish FOMC policy tends to weaken the USD, reducing the value of the DXY. This makes gold cheaper because it is priced in USD. Conversely, a hawkish policy strengthens the USD.

Finally, there is the geopolitical aspect. If tensions in the Middle East ease and a major conflict is avoided, demand for safe-haven assets like gold could fall, causing prices to fall.