Experts warn of short-term volatility as gold prices begin decline

Gram gold began trading at TL 2,246 ($69.81) on Tuesday, down from last week's peak of TL 2,307. Experts note a decline in physical gold prices at jewelers and the narrowing gap between the free market and retail prices. They warn, "Short-term buying and selling in physical gold have become risky due to open margins and high prices. Attention should be paid to Friday's leading inflation data from the U.S. regarding the ounce side."

March 26 gold price

Gram gold, traded in the free market, starts the day at TL 2,246 on March 26. In the Grand Bazaar, it is priced at TL 2,455. One-quarter of gold is being sold at TL 4,171 in the morning hours, while one-half was at TL 8,098, and full gold at TL 16,514.

The U.S. dollar index DXY, crucial for ounce gold pricing, slipped from 104.45 to 104.20. The movement toward 4.24 from 4.2 in U.S. 10-year bond yields is also noteworthy.

Is physical gold still a viable option?

Economists suggest that in uncertain environments, including inflation, it might be wise to opt for gram gold instead of currency.

"However, the recent increase in demand for physical gold has led to a price disadvantage. The buying-selling range is significantly open, making trading difficult. The gap with free market prices has also widened considerably. Especially in short-term physical purchases, caution is advised."

Will ounce gold rise?

This week, the ounce gold market's focus remains on the Federal Reserve's (Fed) initiation of interest rate cuts. Last week, Fed Chairman Jerome Powell's statements indicated that inflation continued to exceed expectations in January and February while the job market remained strong. Thus, the Fed signaled that there was no need for a "rapid interest rate cut". June is now priced with a 75% probability for the first cut.

When will gold fall?

Analysts suggest that price movements in the ounce of gold will continue to be "data-dependent" from now on. They emphasize the importance of closely monitoring this Friday's release of the U.S. Personal Consumption Expenditure (PCE) data, known as a leading inflation indicator. It's noted that if this data exceeds expectations, it could be a negative indicator for March inflation, potentially increasing pressure on ounce gold and leading to declines down to the $2,150-2,145 range in the short term.

Source: Newsroom