A Glint of Hope Amidst Market Turmoil
Despite the recent stumble in equities, gold is anticipated to forge ahead, buoyed by a world rife with geopolitical uncertainty and murmurs of impending interest rate cuts in the U.S. Ewa Manthey, commodities strategist at ING, envisions a path where gold reclaims its lost ground amidst shifting tides in the economic landscape.
Shining Bright Amidst Turbulence
Maintaining a robust 18% growth year-to-date, gold stands tall on the shoulders of relentless central bank purchases, the unwavering support of Asian consumers, and the impending rate cuts set by the Federal Reserve. Manthey foresees a phase of consolidation to be followed by a spirited march forward for the precious metal.
The Golden Thread Continues
Even as gross purchases and sales slacken compared to last year, central bank acquisitions persist, spurred by prevailing economic uncertainties and simmering geopolitical tensions. With the retreat from the pinnacle in prices, Manthey remains resolute in her conviction of a sustained demand.
A Glittering Future Awaits
Pointing to the unwavering influx of positive flows, Manthey points out the consecutive months of inflows into global gold ETFs marking the strongest streak since May 2023. Considering the looming U.S. presidential election and the much-anticipated Fed rate cut, gold’s upward trajectory appears well-calibrated for a stellar performance in the upcoming quarters.
Golden Peaks on the Horizon
Manthey casts her gaze into the crystal ball, predicting an average of $2,380/oz in Q3, with a zenith in Q4 surging to $2,450/oz. The glimmer of hope extends to an annual average touching $2,301/oz, painting a shimmering picture for investors.
Front-month Comex gold for August delivery (XAUUSD:CUR) capriciously ended the week with a slight uptick to $2,432.10/oz, while the front-month August silver (XAGUSD:CUR) relinquished 2.7% to close at $27.487/oz. As the week drew to a close, gold inched up by 0.4%, while silver rested inert.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
Charting the Course Ahead
Gold, ever the steadfast companion amidst tumult and inflationary woes, remains a beacon of stability. Ole Hansen from SaxoBank echoes the sentiment, underlining gold’s pivotal role as a hedge against the choppy seas of global economics. Hansen posits that a potential rate cut by the Federal Reserve could beckon back interest rate-sensitive investors into the golden embrace of ETFs.