Analyst: The structural bullish outlook for gold still exists, and after a sharp decline in gold prices, buying funds are emerging for bottom-fishing.

Golden Finance reports: On March 28, according to Bloomberg, after gold prices experienced the largest-scale selloff in years, bargain hunters have started moving into the gold market. As of Thursday’s close, gold prices had fallen 19% from their January closing peak, putting them near the 20% threshold that has traditionally signaled the start of a bear market. But by Friday, buyers returned, driving gold prices up by about 3%.

George Efstathopoulos, a fund manager at Fidelity International, said that once tensions in the Middle East ease, this pullback will be a buying opportunity. Inflation risks, fiscal pressure, and concerns about bond credibility are still structural positive factors for gold. Analysts also noted that the Iran war could prompt central banks to sell gold, or at least slow their purchasing pace. Daniel Galley, a commodities strategy analyst at TD Securities, believes that given that central banks have been the cornerstone buyers in this bull run, large-scale direct selling would have a more immediate impact on prices and a more destructive effect on market sentiment. But for now, the broader trend is likely to be a step-by-step slowdown in central banks’ gold-buying pace, rather than a complete shift to selling.