Gold, which has almost doubled in value in a little over two years, could rise further but it's no longer a safe bet as a growing risk investment in it becomes overcrowded.

In 2022, this happened to the dollar with the greenback, which is far more liquid than gold, losing 12% of its value in just three months.

A correction for less liquid gold could be a disorderly affair with at least $500 per oz rapidly wiped from its value, although a reversal could stretch as much as $1,000/oz.

The more cash that flows into gold, the bigger the risk and possible extent of a correction.

In contrast, the restraint of bullish positions on the uptrend is growing and scope for further gains may be limited toward $3,000, perhaps $3,200/oz.

Should a correction happen, some cash will probably head toward a safer and more liquid dollar in the short-term.

In the long term, a shift in global reserves by nations politically opposed to the United States could support a rise toward $3,700.
gold targets


Targets for gold correction

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)