Gold Prices Falling Soon? Experts Forecast 38% Market Drop
Gold prices, which have hit record highs in recent months, may see a sharp 38% drop, according to market strategist John Mills from Morningstar. If the forecast holds, gold could fall from its current $3,080 per ounce to around $1,820 per ounce, significantly impacting investors and consumers.
On March 31, 24-carat gold was priced at ₹89,510 per 10 grams in India. A 38% decline could bring it down to ₹55,496 per 10 grams, offering relief to jewellery buyers but raising concerns for investors.
Factors Behind the Predicted Drop
🔸 Rising Supply: Gold mining profits surged to $950 per ounce, encouraging increased production. Global reserves have grown by 9%, with Australia ramping up production and gold recycling on the rise.
🔸 Declining Demand: Central banks, which purchased 1,045 tonnes last year, may slow down acquisitions, with 71% planning to reduce or maintain holdings.
🔸 Market Saturation: Increased mergers and acquisitions in the gold industry signal a possible market peak. ETF investments in gold have also spiked, mirroring trends seen before past price corrections.
Despite this bearish prediction, major financial institutions remain optimistic. Bank of America forecasts gold could hit $3,500 per ounce in two years, while Goldman Sachs expects it to reach $3,300 by year-end.
