Gold prices are expected to rise later this year and in early 2024 as the US interest rate hike cycle will end soon, pushing precious metal up by around 20 per cent to $2,300 an ounce, say analysts.
The yellow metal has been declining in the past few weeks, trading close to a one-month low at $1913 per ounce.
In the past few months, the Gold prices settled into a $1,900 to $2,000 range. Despite the recent weakness, it continued to trade up around five per cent on the year. In addition, investors have responded to the better-than-expected performance across the major stock markets, especially in the US, by cutting back their gold exposure through exchange-traded funds (ETFs).
Since early June, investors have cut their total gold holdings via ETFs by 100 tons to 2,821 tons, the lowest level since April 2020.
Meanwhile, World Gold Council said January and August are historically the strongest months for gold returns.
Bas Kooijman, CEO and asset manager of DHF Capital, said: "Over the longer run, gold could continue to find support from central bank demand, which could remain elevated. Jewellery markets could also help prop up the metal in particular if economic growth remains strong and the Chinese economy recovers more strongly."
Ole Hansen, head of commodity strategy at Saxo Bank. forecasted that outlook for gold, however, remained supportive based on the assumption that the US rate hike cycle will end soon and be followed by a succession of rate cuts. "We see gold hit a new record high later in the year, and once the rate cut cycle begins next year, it may reach as high as $2,300,” added Hansen.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
