Gold’s pullback below the $5,000 mark this week is unlikely to derail its broader uptrend, according to eToro, which views the move as a natural consolidation within a powerful bull cycle.
The precious metal had surged to fresh record highs above $5,000 earlier this month before retreating, as markets reacted to former US President Donald Trump’s nomination of Kevin Warsh as Federal Reserve Chair. The appointment was widely interpreted as hawkish, putting short-term pressure on gold prices. Thinner trading volumes during the Lunar New Year period and US market holidays further amplified the move.
“Gold’s dip below $5,000 this week shouldn’t rattle investors. If anything, it’s a healthy pause in what remains one of the strongest bull runs in recent memory,” said Zavier Wong, market analyst at eToro.
Despite the recent pullback, Wong noted that the underlying drivers of gold’s rally remain intact. The metal has gained more than 14 per cent since the start of the year, supported by geopolitical uncertainty, persistent inflation concerns and shifting expectations around US interest rates.
“Gold has gained more than 14 per cent since the start of the year, and the conditions that have driven that rally – including geopolitical uncertainty, sticky inflation concerns, and a shifting US rate outlook – haven’t gone anywhere,” Wong said.
For UAE investors, structural support for gold remains firm. Central bank purchases continue, ETF inflows are building, and institutional demand has yet to show signs of exhaustion. Expectations that the US Federal Reserve could cut rates later this year are also reinforcing the investment case.
“When you layer in growing expectations that the US Federal Reserve could cut rates later this year, the case for holding gold only strengthens,” Wong said. “That means another leg higher from here is not off the cards, and further record highs aren’t out of the question.”
Wong characterised the current price action as a pause rather than a reversal
“The best way to look at this current consolidation is that the market is essentially catching its breath rather than losing conviction. Any fresh catalyst – whether a softer US inflation print or an escalation in geopolitical tensions – could quickly reignite momentum,” he said.
For investors in the UAE, the recent volatility may represent short-term noise within a longer-term uptrend, and potentially a more attractive entry point compared to recent record levels.