Gold's Price Correction Seen as Healthy Adjustment, Analysts Say

Gold's recent price correction is viewed as a healthy adjustment by market analysts, who believe the metal's underlying bullish drivers remain intact.

Rania Gule, senior market analyst at xs.com, said the pullback allows short-term positions to be flushed out, helping the market rebuild a more balanced base for further upward momentum.

Recent US inflation data came in line with expectations, while the labour market has begun showing signs of weakness, reducing pressure for tighter monetary policy from the Federal Reserve.

Gule noted that the latest data failed to give the Fed strong justification for another rate hike, which is a dynamic that favours gold given its non-yielding asset status.