Retail & Central Bank 'Dip-Buyers' Emerge As Gold Drops Below $4000

Core Viewpoint - The gold market is experiencing a significant correction after being deemed overbought, with prices dropping below $4,000, leading to increased buying interest from both retail investors and central banks [1][3][5]. Market Dynamics - The recent price dip has attracted a new wave of buyers, including retail customers and central banks, indicating a potential turning point in gold's long-term bull market [5][9]. - Retail demand has surged, with reports of long lines outside gold stores globally, as consumers perceive the price drop as an opportunity to buy [5][12]. Central Bank Activity - South Korea's central bank is considering adding to its gold reserves for the first time in over a decade, reflecting a shift in central bank attitudes towards gold [13][14]. - The Bank of Korea plans to monitor market conditions to determine the timing and size of any potential gold purchases, influenced by its international reserves and currency trajectories [16][19]. Analyst Perspectives - Analysts generally maintain a bullish outlook on gold prices, with expectations that any profit-taking by investors will be countered by dip buying from central banks and other physical buyers, keeping price reversals relatively shallow [11][10]. - The London Bullion Market Association's survey indicated that while analysts expect prices to rise, none anticipated trading above $3,300 during 2025, suggesting a cautious optimism [10].