Gold has fallen from 3400 to 3211! Analysts predict it may continue to fall in the future?

The most popular gold among the Chinese experienced significant fluctuation in April. Last month, the price of gold surged to $3,400, then fell all the way to $3,211. According to Economictimes, the drop in gold prices may be politically influenced by the easing of global trade tensions, coupled with the fact that China is currently in the midst of the May Day holiday, leading to a market closure. This world’s leading gold-holding country is selling more than it is buying, resulting in a short-term liquidity vacuum.

Economictimes reminds that the focus will be on next week's non-farm payrolls report in the United States to judge the future economic outlook. Data released on Wednesday showed that the overall U.S. economy was depressed in the first quarter, and corporate tariff sanctions against Trump and possible developments were in a wait-and-see state, as many companies rushed to import a large number of goods before the tariff sanctions, consumers rushed to buy hoarded goods, and the U.S. personal consumption index temporarily showed flatness in March. All eyes are now on Friday's upcoming U.S. non-farm payrolls report (Nonfarm Payrolls Report). Fed policymakers said interest rates will remain unchanged unless there are clear signs of inflation falling to 2 percent or the job market continues to deteriorate.

Analysts believe that Trump's recent statement about engaging in goodwill trade negotiations with countries such as China, India, Japan, and South Korea has eased the globally tense trade situation, significantly boosting investor confidence and leading them back to high-risk financial products. This is also a reason for the fall in gold prices. The following is a comprehensive analysis.

Trade tensions ease, gold profit taking.

RJO Futures senior market strategist Bob Haberkorn believes there are signs that the United States and China are about to reach a trade agreement, and that China has also begun to engage with the Trump administration, causing riskier financial products to heat up. This has led to profit-taking in traditional safe-haven assets like gold.

Trump expressed that he will reach trade agreements with countries like China and Japan.

Trump indicated that he may reach trade agreements with China, India, Japan, and South Korea, stating that this is a good opportunity to make a deal with China. Additionally, according to a Reuters report, Chinese state media's social media account claimed that the U.S. has reached out to China seeking negotiations on Trump's 145% tariff. Investor panic is gradually calming, returning to high-risk investment markets.

China's long holiday causes a liquidity vacuum

TD Securities stated in a report that gold has experienced a Liquidity Vacuum due to China's long holiday. A liquidity vacuum occurs when the spread between the buying and selling prices of financial products widens and transaction costs become excessively high.

Is gold still the preferred choice for a value-preserving investment?

The golden status still exists. Ole Hansen, the head of commodity strategy at Saxo Bank, believes that market sentiment has caused a short-term pullback in gold prices, but the structural driving factors supporting the strength of gold remain solid and reliable.

The current price of gold has reached $3,241.36, with a growth of only 3.69% over the past thirty days, compared to a growth of 17.53% over the past six months. In terms of percentage increase, the rise in gold is not as rapid as in the past, while Bitcoin, known as digital gold, has grown by 14.65% in the past month. In summary, gold may not necessarily experience another significant fall in the future, but overall data suggests that the profit growth of gold is very slow. This is purely market observation, not any investment advice.

This article discusses how gold has fallen from $3,400 to $3,211! Analysts predict it may continue to fall in the future? Originally appeared in Chain News ABMedia.