Natixis: The gold price sell-off may be due to central bank selling, but long-term buying opportunities remain

(1) Bernard Dahda, a precious metals analyst at Natixis, stated that the recent sell-off in gold may be due to central banks selling gold to defend their local currency exchange rates or to provide funds for energy purchases. He pointed out that if inflation concerns and central bank policy shifts were the only driving factors, the US Dollar Index and US Treasury yields should fluctuate sharply in tandem, but this has not been the case.(2) Dahda believes that the two main factors that drove gold prices up last year have now reversed, and gold prices may face downward pressure in the short term. He added that physical-backed ETFs may also experience larger-than-normal sell-offs.(3) Although the possibility of further declines in gold prices cannot be ruled out, Dahda considers lower prices a long-term buying opportunity. He said that if energy infrastructure suffers limited damage and oil prices quickly retreat, central banks may be more willing to buy gold, which could push gold prices back above $5,000 per ounce.