Gold’s selloff may be an opportunity in disguise for investors as the Fed looks to cut interest rates

Core Viewpoint - Gold prices have experienced a significant decline after reaching a record high, presenting a potential buying opportunity for investors as the Federal Reserve is expected to cut interest rates further before the year ends [1][3]. Group 1: Market Trends - Gold futures for December settled at $3,983.10 per ounce, marking a 0.9% decrease and a third consecutive session loss [3]. - Since the record high of $4,359.40 on October 20, gold prices have dropped nearly 9% [3]. - Despite the recent decline, gold is still trading approximately 3% higher this month and has gained nearly 51% year-to-date [3]. Group 2: Expert Insights - Ryan McIntyre from Sprott Inc. stated that gold remains well-positioned for long-term growth due to eroding global trust levels, which drive demand for independent assets [2]. - Aakash Doshi from State Street Investment Management described the recent decline in gold prices as temporary, suggesting a potential buying floor around $3,600 to $3,650 [4]. - Stefan Gleason from Money Metals Exchange noted that the expected interest rate cut by the Fed would support the pro-gold narrative, as lower rates benefit non-interest-yielding gold [5]. Group 3: Economic Context - The precarious fiscal outlook in Western economies, particularly the U.S. with high deficits and substantial federal debt, could support gold prices over the medium to long term as sovereign risk rises [2]. - Gleason emphasized that the world is overexposed to the U.S. dollar and underexposed to gold, predicting that gold prices will continue to rise in all fiat currencies after adjusting from recent fluctuations [6].