Attention gold owners and debtors: A May storm is on the horizon

Speaking on the 'Ekonomi Masası' program broadcast on the Nasıl Bir Ekonomi TV YouTube channel, Gold and Money Markets Expert Şirin Sarı shared her assessments of the gold market and issued notable warnings to investors.

Sarı stated that sharp declines could be seen in global markets, particularly until the middle of May.

Noting that eyes in global markets are turned toward central banks, especially the US Federal Reserve (Fed), Sarı stated that employment and inflation data from the US would be decisive.

Sarı expressed that if US inflation continues to remain above 3.3 percent, the Fed could adopt a more hawkish stance, and that this situation would create downward pressure on gold prices.

Stating that investors turn to bonds offering interest returns if the high-interest environment persists, Sarı said that for this reason, the suppression of gold is inevitable.

INFLATION AND GOLD DEMAND IN TURKEY

Emphasizing that inflation expectations in Turkey have increased gold demand in the domestic market, Sarı stated that gold imports approached record levels in the first quarter of the year.

Stating that monthly inflation exceeding 4 percent has had a negative impact on the economic system, Sarı noted that even price increases that have not yet occurred are being reflected on price tags, and that Turkey has become one of the most expensive countries in the world post-pandemic.

HOW FAR WILL THE PULLBACK GO?

Touching on technical levels for gold prices, Sarı warned that if the price drops below the 4,500 dollar level on a global scale, prices could rapidly retreat to the 4,300 and 4,100 dollar band. Stating that this decline would also be reflected in the gram gold side of the domestic market, Sarı predicted that gram gold could pull back toward the 6,300 and 6,000 levels.

Sarı also stated that the price difference between banks and jewelers has closed, and that with the weakening of demand in the domestic market, this difference has occasionally turned negative.

THE "SELL IN MAY AND GO AWAY" EFFECT

Pointing out that seasonal effects are also decisive in the markets, Sarı recalled the widely known "sell in May and go away" approach in global markets. Stating that a widespread wave of selling, including gold, cryptocurrencies, and stock markets, could occur until mid-May, Sarı expressed that this process could continue until the 20th of the month. Sarı stated that after this date, a more positive outlook could emerge in the markets.

Stating that the most important factor preventing sharper declines in gold prices is the physical gold purchases by central banks, Sarı said that China, Kazakhstan, Uzbekistan, and Poland continue to increase their reserves.

Sarı added that geopolitical risks have been somewhat internalized by the market, and that these risks have remained in the shadow of the artificial intelligence rally and have not been fully reflected in prices.