Gold Prices May Plummet 37% If Breaks Below $3,857

Gold prices may see a significant decline if they break below $3,857 per ounce, according to a report by World Gold Council. The next major support level for gold would be at $3,500 per ounce, which represents a 37% drop from the January high. This could be a sign of a more important floor being found in the market.

The Japanese yen's surge, supported by the first coordinated US-Japan intervention in currency markets, may also provide support to gold prices. A stronger yen and a weaker dollar could have a positive impact on gold if these trends persist.

At present, gold is trading at around $4,063.80 per ounce. The London Bullion Market Association (LBMA) Gold Price PM fell 1% last week to $4,027 per ounce, resulting in a year-to-date decline of 7.8%. This decline can be attributed to changing interest rate expectations after the US Federal Reserve kept rates unchanged.