Key insights
- Yardeni Research views gold's recent pullback as a potential buying opportunity, citing strong technical support and a long-term bullish outlook tied to S&P 500 growth. However, near-term headwinds include a stronger dollar, rising interest rates, and potential Fed hawkishness. The firm maintains high price targets for gold, contingent on the resolution of Middle East conflicts and a broader shift into alternative assets as equities advance.
Investing.com -- Gold appears to be holding above some key technical levels, and Yardeni Research said in a note Friday that it believes support should hold, making the recent pullback a potential entry point for investors willing to look past near-term headwinds tied to the Middle East conflict.
The precious metal peaked on January 29 before tumbling near the end of March as fighting escalated in the region.
It rebounded through mid-April during a brief ceasefire but is now testing its March 26 low, its 200-day moving average and its intermediate uptrend line simultaneously.
Yardeni Research said "that’s quite a bit of support, which should hold, in our opinion," noting that the pullback has also returned gold to the upward-trending channel that has been in place since late 2023.
The firm maintained its price targets of $5,500 by year-end and $10,000 by the end of the decade, arguing that "the rally in gold should resume once the war is over."
Yardeni identified the stronger dollar, upward pressure on interest rates and central bank gold sales as the primary near-term headwinds, and flagged the Federal Reserve as an additional risk, saying it "is likely to turn more hawkish during the summer," which could stall any serious rally attempt.
The long-term case, Yardeni Research said, is tied to a broader call for the S&P 500 to reach 10,000 by decade’s end, with investors expected to rebalance progressively into alternative assets including gold as equity markets advance.
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