Introduction to Gold Market 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. However, many experts agree that this week’s retreat isn’t a reason to worry.
Expert Analysis on Gold Price
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 Federal Reserve 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 on Critical Minerals
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.
Key Points of the US-Ukraine Deal
A total of 55 minerals are reportedly covered in the arrangement, but more can be added in the future if there is consensus between the US and Ukraine. Although the US will get preferential rights to mineral extraction, Ukraine will have the final say on what is mined and where, and will retain subsoil ownership. 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.
Conclusion
In conclusion, the current gold market trend may have caused concern among some market participants, but experts remain bullish on gold in the mid to long term. The upcoming Federal Reserve meeting and the US-Ukraine deal on critical minerals are also important events to watch. As the global focus on critical minerals continues to grow, it will be interesting to see how these developments impact the market. With experts predicting a potential path to US$7,000 for gold, it’s an exciting time for investors and market watchers alike.
