Gold Price Correction: Is the Recent Gold Price Correction a Signal to Buy?

As global interest rates approach their peak levels, there is speculation that the US Federal Reserve may commence interest rate cuts by the end of the current calendar year. Such a decline in interest rates historically correlates with an upward trend in gold prices, as it reduces the opportunity cost of holding the precious metal.

Despite a minor correction, the outlook for gold prices remains positive, presenting a favorable entry opportunity for long-term allocation strategies.

In terms of allocation strategy, it is advisable to consider a normal range of 5-15 percent allocation to gold within investment portfolios. This implies that investors should maintain approximately 5-10 percent of their total portfolio value in gold.

Looking ahead, gold prices will be influenced by central bank actions, the US dollar index (DXY), the possibility of US recession, and geopolitical situations such as those between Russia-Ukraine and China-Taiwan.