Gold prices may fall in the coming months. Here’s why that’s great news.
Subscribe to enjoy similar stories. In all my previous articles, I have advocated bullishness in gold. I shared data showing why the precious metal is the ultimate store of value and source of capital appreciation, rolled into one.
Yet the headline of this article seems contradictory and misleading. I assure you it is not. I am as bullish as ever on bullion, and this piece offers a rational look at how financial markets are expected to price assets in 2025.
It is a known fact that prices seldom move in a straight line. There are always traders and investors who feel prices have run up “too much" and want to get off the bus. This is a routine price-discovery mechanism for you, and the process only serves to strengthen the bull market.
Confused? Allow me to explain. The majority of traders and investors are used to thinking small and so invariably take small profits from their trades and investments. Their collective actions can dent the price of any asset in the near term.
When they exit, other short-term traders enter with modest but higher price targets, and the bull run continues. Also read | PPFAS AMC: What its latest five stock picks reveal A raging bull market or even a supercycle (the strongest kind of bull market there is) occurs when selling by weaker hands is quietly absorbed by stronger hands. These are savvy investors who think of huge price movements over longer periods.
Small blips in the price don’t worry them. In my previous piece I wrote about my hypothesis of a procyclical hysteresis in the global financial markets from 2025 onwards. Procyclicality is an economic phenomenon in which asset prices move in the same direction as the overall economy.
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