StoneX Analyst Says Gold in 'Consolidation Mode' After Reaching All-Time Highs in April

In a recent Reuters article from May 7, Rhona O’Connell, Head of Market Analysis, EMEA & Asia at StoneX provided her insight on recent gold prices.

“It (gold) is definitely overbought and some of those profits are now been taken out of the market, so it's very much in consolidation mode," said O'Connell.

Gold recently hit a record high in April, primarily due to central bank purchases, led by China, amid growing geopolitical uncertainty. In addition, the Chinese public have shifted yuan into gold, which has been perceived as a safer option given China’s stock exchange and real estate losses.

O’Connell added: "I still think that the tailwinds particularly with respect to geopolitical risk and potential stresses in the banking system, are strong enough to give gold support rather than to reverse the moves that we saw across margin into April."

According to China’s central bank data, they added 60,000 troy ounces to their reserves in April alone. China has continued its 18-month streak of purchasing gold despite high prices and a weakened yuan.

Investors are now anticipating comments from the Federal Reserve regarding interest rates and inflation, as Fed funds futures traders believe there is more than a two-thirds chance that the Fed will initiate rate cuts in September.

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