Gold has had a tough time in the market as of late, and if you read expert commentary around the web, it’s likely to continue falling. However, is it possible for the commodity to rebound? Today, we’ll talk about why the experts are saying gold is likely to continue downward, the potential of a rebound, and what traders should be watching for ahead.
Why Experts Are Calling For More Declines In Gold
As mentioned above, gold has been falling in value as of late, and the experts are saying that the declines are going to continue. At the end of the day, these expectations are based on the fact that gold is a safe haven investment. You see, the experts are arguing that safe haven demand for gold is falling for a few big reasons…
- Brexit – First and foremost, fears surrounding the Brexit are starting to fade. While the action is still taking place, it seems less and less likely that a hard Brexit will happen and that anything monumental will happen with regard to the global economy as a result. So, Brexit-fueled safe haven demand seems to be vanishing.
- French Election Results – In the presidential elections, Emmanuel Macron took a landslide victory to become the next President of France. This is great news for the European economy as Marine Le Pen would have threatened a French exit from the Union. Nonetheless, because Macron will be the next French President, fears of further gloom and doom in the eurozone are subsiding.
- Trump Fears – Finally, there have been fears that Donald Trump would lead to problems for the United States market as well as the global market and economy. However, that doesn’t seem to be the case any longer.
Can Gold Rebound?
While gold has had an incredibly rough time in the market as of late, and experts are calling for further declines, the truth is that anything can happen in the market. While it seems unlikely at the moment, gold could, indeed rebound. For this to happen, we would have to see one of two things…
- Supply Declines – If for any reason gold supplies were to fall, whether it be production shortages, or any other reason, gold could stage a big rebound. However, given current mining conditions, this doesn’t seem like it would happen any time soon.
- Demand Increase – On the more realistic side of the coin, we could see increases in demand. In particular, when conditions are poor in the gold market, India tends to lift demand as they buy at lows. In fact, this is happening at the moment. While this isn’t likely to lead to large upward movement on its own, it is providing some support. So, if something else were to happen, for instance, a Brexit shock, the gains in the precious metal due to increased demand would likely be large.
What Traders Should Be Watching For Ahead
Moving forward, traders should pay close attention to gold as the precious metal is likely to lead to several profitable opportunities ahead. However, if you want to take advantage of these opportunities, it’s going to be important to stay on top of the news. In particular, keep a close eye on what’s going on with factors that cause movement in supply and demand. Buying in India, mining conditions, the Brexit, and more could all lead to movement in the value of the commodity.