Gold Prices Expected to Stabilize Despite Market Decline, Latest News Reports
Gold prices experienced a significant drop on Friday, marking their biggest daily loss in recent times. Both ounce and gram gold finished the day with a decline of over 3 percent, with gram gold testing below 2400 lira. On the other hand, the stock market, which had broken records by surpassing 11 thousand points on May 21, faced consecutive declines over the last two weeks. The BIST 100 index approached 10 thousand points due to the impact of withdrawals.
The sharp decline in value in both gold and the stock market has raised questions about the reasons behind it and how investors should position themselves during this period of extreme market volatility. Financial Consultancy and Founding Partner Belgin Maviş and Economist Hikmet Baydar discussed these issues with milliyet.com.tr.
Economist Hikmet Baydar explained that the strong non-agricultural employment data from the USA in May, which exceeded expectations with 272 thousand new jobs, disrupted expectations for interest rate cuts. This caused gold prices to plummet to $2293 in a single day, a level that had been targeted for a long time. The data suggests that the Federal Reserve may not rush to reduce interest rates.
Despite the decline in ounce gold, there is still potential for support at current levels. Gram gold, with significant support around 2367 lira, is not expected to break these levels downwards. Belgin Maviş stated that if gram gold drops below 2400 lira, it could present a buying opportunity in the 2380-2370 range.
Concerns about the introduction of a transaction tax on the stock exchange have also impacted market sentiment. This tax could potentially affect daily traders and overall market volume, leading to further declines in the stock market, which could test the 10 thousand point level.
Investors are advised to be cautious during this period of extreme market volatility and avoid panic buying or selling. It is recommended to accumulate positions at support levels and consider gradual purchases at lower levels over time. Despite the current downward trend, opportunities for buying may arise, especially if gram gold drops below 2400 lira.
