Immediate Reaction in Gold Valuations
The illustrious metal has depreciated by nearly 1% in light of the recent revelation: China’s cessation of gold acquisitions for its reserves, marking the end of an 18-month continuous buying spree.
Contextual Overview
To provide some perspective, the People’s Bank of China (PBOC) emerged as the foremost net purchaser of gold in the preceding year. Hence, this development carries a certain weight. Nevertheless, it is my contention that this does not alter the fundamental long-term outlook for gold.
Short-Term Market Sentiments
In the immediate term, traders might be rattled by this headline. In my estimation, gold remains primed for a more substantial correction following its ascent past the $2,400 mark.
The early June lows, situated at $2,314-$2,315, remain intact. Therefore, the recent dip does not yet herald any significant technical breakdown in gold prices.