Global central banks are now turning increasingly hawkish. The tangible risk of tighter monetary conditions is making investors nervous and putting gold prices under significant pressure.
Since the start of last week, the precious metal has dropped by nearly 12%—a seven-day loss not seen in thirteen years. So, market sentiment has clearly taken a more pessimistic tone. With higher interest rates on the horizon, players are gravitating toward return-bearing assets, leaving non-yielding ones like bullion out in the cold. Adding to the pain, gold-backed exchange-traded funds (ETFs) have recently experienced record outflows. Between March 16 and 20 alone, withdrawals reached a six-month high. In total, investors pulled nearly $4.5 billion—five times the amount seen the previous week.
That said, every cloud has a silver lining. Even a decline as brutal and prolonged as this one cannot last forever. At some point, bearish pressure runs its course—when the supply of available assets dries up and sellers lose their appetite for ever‑lower prices. Typically, this phase is marked by fading downside momentum, as short positions are covered and some buyers return to the market, hoping for a correction. Such a scenario is likely to unfold in the near future. Gold is approaching the $4,300 support level. Quotes appear poised to bounce from this threshold toward the $4,500–$4,550 range.
The final recommendation:
— Buy gold at current prices, targeting $4,550 over the next one to two weeks;
— Place Stop Loss at $4,275 per troy ounce, just below the support level, to manage risk if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
