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Investing.com – Price could rise to a record $2,500 a troy ounce in the coming years amid lower interest rates and recession risks. Such forecasts were given by some analysts, interviewees CNBC.
“My target is $2,500 by the end of 2024. This is largely due to the fact that a recession could begin at the end of this year and gain momentum in 2024,” said David Neuhauser, founder of the American management company Livermore Partners.
The historical maximum price of gold reached at auction on August 7, 2020 at $2,072.5 per ounce, according to Refinitiv data. As a result of trading on Thursday, August 10, 2023, the price of the June futures for gold on the New York Comex exchange was $1914.4 per ounce. Thus, the forecast of $2,500 per ounce implies a 30.6% increase in gold prices.
“Bullish” forecasts for gold are also due to the protective properties of the precious metal in the face of rising inflation. According to Neuhauser, stagflation is expected in the world economy in the next few years, since inflation will be in the range of 3% to 5%. For comparison, the inflation target of the Fed and the ECB is 2%.
“I’m sure we’ll see $2,500 gold within a few years,” agreed Randy Smallwood, CEO of Canadian trading company Wheaton Precious Metals.
He noted that any scenario with a recession in the economy would have a positive effect on gold. At the same time, Smallwood expects the weakening of the US and Chinese economies.
Singaporean bank UOB also predicts that gold prices will set new records in the second half of 2024. writes RBC.
“A key driver of our positive outlook for gold is the anticipated peak of the Fed’s rate hike cycle, as well as the upcoming weakening of the US dollar,” said Heng Koon Hou, head of market strategy, global economics and market research at UOB.
According to his forecasts, gold will reach $2,100 in the second quarter of 2024.
Howe explained that gold prices should rise with a rate cut and a weakening US dollar. The depreciation makes the precious metal cheaper for holders of other currencies. At the same time, lowering rates increases the attractiveness of gold against the backdrop of falling bond yields.
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Text prepared by Timur Aliev
2023-08-11 11:51:00
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