Gold rate prediction: Gold price prediction: Gold rate crash to continue or is there any positive outlook? Experts’ opinions are out
Golden Ratio
Gold is the classic safe haven: an asset that people buy to protect their savings when they are worried about financial risks.
With international political tensions rising, trade war threats, shifting signals about where interest rates are heading, and a potentially changing world order, investors are looking for assets that feel stable when everything else seems shaky.
Friday’s decline in gold and silver was driven by financial markets’ reaction to the initial news that Donald Trump had nominated Kevin Warsh to head the US Federal Reserve. The US central bank plays a key role in global financial stability.
Central banks around the world have been rapidly purchasing gold, cementing its reputation as a store of value in times of uncertainty.
Gold Price Prediction
The decline in precious metals came as US President Donald Trump nominated Kevin Warsh to be the next Federal Reserve chairman, triggering a recovery in the US dollar.
Analysts said Warsh would be less supportive of low interest rates given his hawkish stance on inflation controls and his emphasis on the Fed’s independence, which has led to a selloff among precious metals traders.
“The US dollar strengthened, real yields rose, and leveraged positions in gold and silver resulted in a rapid unwinding of overextended depreciation hedges. Rather than signaling the reversal of a structural bear market, this resulted in violent liquidation, wiping out billions in market cap, and pushing out weak hands in a classic euphoria-exhaustion phase,” analysts said.
However, they argued that structural supply deficits and industrial demand continue to support the upward trend. “The central bank’s incessant accumulation of gold, structural supply deficits of silver combined with rising industrial demand from green energy, EVs, AI and electronics” support the positive long-term outlook.
Kathleen Brooks, director of research at the XTB trade group, said the “interesting election could give the market some hope that the Fed’s independence will be preserved.”
Trump’s personal attacks on Fed boss Jerome Powell (who is scheduled to depart in May) have raised widespread fears among investors that the central bank’s policy independence is under threat and potentially poses an inflation risk to the US economy.
