Introduction to Gold Trends
Gold trended down this week, dropping to just over US$3,200 per ounce on the first day of May. While the yellow metal remains historically high after a strong run this year, its price has pulled back from last week’s record-setting level of US$3,500, causing concern for some market participants.
Expert Analysis on Gold Prices
However, many experts agree that this week’s retreat isn’t a reason to worry. Speaking to the Investing News Network, Gareth Soloway of VerifiedInvesting.com described it as "very normal," saying he remains bullish on gold in the mid to long term. His technical analysis shows that the US$3,100 to US$3,140 area will be important to watch moving forward — in his view, that’s when bullish players should start re-entering the space, boosting the price. Soloway also outlined gold’s future price potential, saying he sees a potential path to US$7,000.
Upcoming Fed Meeting
Eyes are shifting to the US Federal Reserve’s next meeting, set to run from May 6 to 7. It follows initial numbers showing that real GDP contracted by an annual rate of 0.3 percent in Q1. That’s the first negative reading since 2022, and as the news weighed on the stock market, US President Donald Trump took to social media to suggest the data is an "overhang" from Joe Biden’s term. Trump has pressured Fed Chair Jerome Powell to cut interest rates sooner than later, but CME Group’s FedWatch tool shows the vast majority of market participants expect rates to stay flat.
US-Ukraine Deal
The US and Ukraine signed a much-anticipated minerals deal on Wednesday, ending months of often-tense negotiations between the two countries. If approved by parliament in Ukraine, the agreement will set up a reconstruction investment fund that will be split 50/50 between each party. According to Ukrainian officials, the deal is more equitable than previous versions. The fund will be financed only by new licenses for critical materials, oil and gas; aside from that, Ukraine will not have to pay back wartime aid provided by the US.
Critical Minerals and Global Focus
The agreement comes on the back of an increasing global focus on critical minerals, many of which are key for new technology and important industries like defense. It’s worth noting that while Ukraine is home to a wide variety of these commodities, more geological data will be needed to determine commercial viability — for example, there is no up-to-date information on the country’s reserves of rare earths, which are important to the US.
Conclusion
In conclusion, despite the recent drop in gold prices, experts remain bullish on the metal’s future prospects. The upcoming Fed meeting and the US-Ukraine deal are also significant events that will impact the market. As the global focus on critical minerals continues to grow, it will be interesting to see how these developments play out and affect the prices of gold and other commodities. With many factors at play, market participants will be watching closely to see what the future holds for these critical resources.
