© Reuters.
Investing.com – Gold prices fell to their lowest levels in 3 months on Wednesday and Thursday, as central bank chiefs said they would continue to raise interest rates, which is not in favor of gold.
Investment bank ABN AMRO believes that gold will end the year higher, but the bank’s analysts are lowering their expectations.
And the chief economist, Georgette Boyle, believes that gold prices will be fixed at $ 2,000 for the rest of the year and for the year 2024, after she used to see gold at $ 2,200 for the year 2024.
“Investors do not seem eager to buy gold at current levels perhaps because prices are relatively close to all-time highs and if prices fall, the current level cannot be seen for more than 5 years,” she said in a research note.
Boyle’s downgrade of gold expectations comes as the precious metal struggles below $1,950 an ounce. August was trading at $1,919.60 an ounce in a very volatile session on the impact of mixed US data.
Boyle believes that the shift in weakness is caused by a change in the market’s view of the Federal Reserve’s position, after the markets had expected the Fed to stop raising interest rates, due to the banking crisis that creates increasing credit restrictions. Markets are back in anticipation of a rate hike due to the Federal Reserve’s insistence that the rate hike is not over.
She said, “We did not adhere to the view that the interest rate should be cut strongly in the foreseeable future, but we expect the monetary easing cycle to start by the end of this year.” “We don’t see a rate cut this year, and we see lower cuts for 2023-2024, which will support the American.”
According to Boyle, the Dutch bank expects the Federal Reserve to cut rates by 175 basis points next year as the economy enters recession in the first quarter.
Although interest rate cuts will continue to support gold prices over the next year, Boyle says they could provide the important upward momentum needed to push prices to all-time highs.
“What the market expects has already been reflected in gold prices, which rose strongly. Therefore, we believe that gold prices against the US dollar will have a limited ability to rise at current levels,” she said. “Investors still hold long positions, but there is a risk that some of these positions will be liquidated. However, it is possible that investors bought these positions when gold prices were low and therefore would not be patient before selling them. All in all, the position in gold is not extreme. But from the point of view of risk To the bonus, we don’t see the current levels as attractive to buy.”
Disclaimer: This report is merely a news transfer of the bank’s expectations and does not reflect our opinion on Investing.com.. We do not bear any responsibility for following what was stated in this report.
The report talks about gold futures contracts, not about gold prices in goldsmiths’ shops.
2023-06-29 15:24:00
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