Gold price forecast are nearing the $2,400 per ounce resistance level again. A recent report from Metals Focus suggests that gold is likely to hit new record highs soon.
Forecast for Gold Prices
According to Metals Focus, the Federal Reserve impact on gold expected shift towards monetary easing will drive gold prices up in the latter part of the year. Neil Meader, Director of Gold and Silver at Metals Focus, predicts, “We expect gold prices to rise, with a new all-time high approaching.”
Historical Context and Predictions
Meader points out that the recent peak of $2,450 is lower in real terms compared to the 1980 peak. He estimates that $2,450 would be around $3,000 today when adjusted for inflation. Metals Focus forecasts an average gold price of $2,250 per ounce for this year, representing a 16% increase from last year’s average.
Economic Factors Influencing Gold
The gold price forecast comes after disappointing U.S. economic data and increased slack in the labor market. These factors have raised expectations for the Federal Reserve to begin a new easing cycle in September. Despite ongoing aggressive monetary policy, Metals Focus believes gold price forecast will not see significant declines this year.
Supporting Factors for Gold’s Rally
Analysts highlight several factors supporting gold’s strong performance this year. Global central banks’ persistent demand, a challenging global fiscal outlook, geopolitical uncertainties, and a weakening Chinese economy are all contributing to higher gold prices. These factors help gold withstand the pressures of a strong U.S. dollar and rising bond yields.
Future Expectations
Meader notes that U.S. rate cuts are inevitable, whether they occur this year or next. Geopolitical conflicts in the Middle East and Ukraine are unlikely to resolve soon. Additionally, tensions between the U.S. and China remain high. As physical markets adapt to higher prices, gold’s fundamentals are expected to strengthen.
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