Gold Price Correction Deepens: When Should Dip-Buyers Start Accumulating?

investing.com:

At the start of December last year, gold prices reached a new all-time high of $2,135 per ounce.

Since then, however, the yellow metal struggled to maintain this level amid a rebounding US dollar, mostly boosted by robust US economic data that could delay the Fed's pivot from March to May.

But despite the correction, bullion still hovers around the $2,000 line, indicating that the positive outlook for the medium and long term persists.

Fundamentally, the yellow metal is poised to continue attracting robust demand from central banks, retail investors keen on both physical gold and ETFs, and the burgeoning jewelry industry.

Against this backdrop, buying into gold's dip may be a smart, safe play for long-term investors. But at which level?

Let's take a deeper look at all the factors to better answer that question.

Although the US dollar has exhibited short-term strength this month as seen in the EUR/USD pair dropping from 1.11 to nearly 1.08, it is still a local uptrend.

The stronger-than-expected data supports the Fed's hawkish stance, but it is likely a temporary strengthening, with the pivot expected later in the first half of the year.

Previous instances of Fed pivots have shown an upward trajectory in gold prices in the subsequent months.

There is no indication that this scenario will be different this time.

Gold appears poised to sustain its upward trajectory, bolstered by escalating conflicts, particularly in the Middle East, which tends to drive investors toward safe-haven assets.

The demand outlook for the precious metal remains optimistic.

A key factor contributing to gold's positive outlook is the continued appetite of Central Banks for the metal.

In 2023, Central Banks were active in gold purchases,