Time to start buying gold for the long term, suggest analysts

Analysts are turning bullish on gold, and suggest the current weakness in the prices can be used to buy the yellow metal from a long-term perspective.

Gold prices peaked intraday at $4,381.5 per ounce (oz) on October 20, or 33.3 per cent above the prevailing 200-day moving average (DMA) after which profit booking set in, data suggests. The last time gold was this much above the 200-DMA was in May 2006.

"With the 200-DMA currently at $3,371/oz, or around 23.1% below the peak, it is a good level to accumulate more gold if the bullion corrects further, which is certainly possible, wrote Christopher Wood, global head of equity strategy at Jefferies in his recent note to investors, GREED & fear.

In the last one year, gold has been one of the best asset classes, with prices rising 53.3 per cent as investors rushed to buy the yellow metal in the backdrop of stiff US tariffs amid geopolitical concerns. Central bank buying, too, helped prop up prices in the last few months.

Reported global net purchases of gold, according to Marissa Salim, senior research lead for APAC at the World Gold Council (WGC), totaled 200 tonnes year-to-date (YTD), slightly lower when compared to the same period in 2024 (215 tonnes).

The National Bank of Poland remains the largest reported net buyer in 2025 so far (at 67 tonnes), followed by National Bank of Kazakhstan (40 tonnes) and Azerbaijan (38 tonnes), Salim said.

Consolidation phase

Though analysts remain bullish on the long-term prospects of gold, they expect the prices to remain range-bound in the short-term after a sharp rally in the last one year.

Those at Julius Baer, for instance, suspect that gold might just have entered a multi-month consolidation phase. During this phase, they see a maximum pullback risk at around the $3,500/oz level.

“At the same time, we are buyers of this pullback, as the debasement of G7 fiat currencies will not stop anytime soon in a context of fiscal dominance in most developed economies,” wrote Yves Bonzon, group chief investment officer at Julius Baer in a recent report.

That said, market sentiment, according to analysts, further shifted in favour of gold in the last few days after the University of Michigan’s Consumer Sentiment Index fell to 50.3 in November, its lowest level since mid-2022, reflecting growing unease over the US economic outlook.

“These developments collectively pressured the dollar and Treasury yields, bolstering bullion’s appeal as a hedge against economic uncertainty. However, optimism surrounding a possible resolution to the prolonged US government shutdown could temper gold’s upward momentum, as improving fiscal stability may reduce safe-haven inflows,” cautions Riya Singh, commodities and currency analyst at Emkay Global.

Tech view

From a technical perspective, the first key technical support for gold, according to WGC, is seen around its medium-term 55-day average and initial Fibonacci retracement of the rise from the 2022 low, both of which are near $3,800/oz. At this point, they expect to see classic ‘dip buyers’ step in.

Longer-term and more important support, they believe, is seen at the $3,500/oz April peak, which, if seen, would represent a fall similar to those that occurred in 2020 and 2022.

“Should gold march higher, technical resistance levels above the US$4,382/oz current peak are seen next at $4,420/oz, then $4,500/oz-US$4,520/oz, ahead of $4,675/oz,” WGC analysts wrote in a recent note.