Latest gold selloff could be a buying opportunity ahead

The gold market's latest price drop could be a buying opportunity as the Federal Reserve is still expected to be in no hurry to raise interest rates despite who is sitting at the head of the table, according to one analyst.

In a report published Friday, Suki Cooper, precious metals analyst at Standard Chartered Bank, said that she sees higher prices for gold through the first quarter of 2022 as the market continues to focus on rising inflation pressures and lower real bond yields.

"We believe that many of gold's headwinds have been priced in – from USD strength to the Fed tapering timetable – and prices have held up well. While these headwinds could re-emerge, downside risks to growth, plus elevated inflation and our expectations for the USD to weaken and real yields to remain deeply negative, suggest price dips are likely to be viewed as good buying opportunities," Cooper said in the report.

Standard Chartered is looking for gold prices to average the first quarter around $1,875 an ounce, representing a 3% gain from Monday's price. The gold market dropped sharply below critical support at $1,835 an ounce after the White House announced that President Joe Biden will nominate Jerome Powell to remain as Chair of the Federal Reserve.