After the sharp decline in gold prices, bargain-hunting funds emerge; analysts say structural positives remain

Golden Ten Data reported on March 28 that after the largest gold sell-off in years, dip buyers have started to enter the gold market. As of Thursday’s close, the gold price had fallen 19% from its January closing peak, nearing the traditional 20% threshold that signals the start of a bear market. However, by Friday, buyers returned, pushing gold prices up by approximately 3%. George Efstathopoulos, a fund manager at Fidelity International, said that once Middle East tensions ease, this correction will present a buying opportunity. Factors such as inflation risk, fiscal pressure, and bond credit issues remain structural tailwinds supporting gold. Analysts also noted that the Iran war could prompt central banks to sell gold, or at least slow their pace of purchasing. Daniel Ghali, a commodities strategist at TD Securities, believes that since central banks have been cornerstone buyers in this bull market, large-scale direct selling would have a more immediate impact on prices and a more damaging effect on market sentiment. But for now, the broader trend is more likely to be a stepwise slowdown in central bank gold purchases, rather than a total shift toward selling.