Gold prices seem likely to exceed $2,000 an ounce this year, although there is some turbulence, while the U.S. showing down its pace on rate hikes and could eventually stop increasing it, according to analysts.
The gold’s spot price hiked over $1,900 an ounce, rose about 18% since early November due to the ease of inflation’s pressure and the market has forecast that monetary policy will be less aggressive from the U.S. Federal Reserve.
The fast-increased interest rates last year caused gold prices to move downward and hit its lowest point at $1,613.60 an ounce in September from the height of $2,069.89 an ounce in March, which was the highest record of 2022.
The high rate will increase the returns on bonds, and non-yielding gold did not attract the investors as much. The situation led the dollar to the strongest level in 20 years, for the buyer, the gold prices were very high.
Analysts at Bank of America noticed that the weakening U.S. currency and bond yields will become macro tailwinds for the gold and elevate its prices over $2,000 an ounce in the coming months.
WisdomTree analyst Nitesh Sha noted that the pressure of dollar and bonds dropped and investors are likely to buy the bullion to hedge the inflation and economic turbulence. The prices could rise to surpass $2,100 an ounce at the end of the year, while adding that gold is still a safe place to store wealth.
Analysts forecast that central banks will continue stockpiling gold after in the first nine months of 2022 they had bought the yellow metal more than any year in half a century, according to the World Gold Council.
The analysts of ANZ said retail demands of gold bars and coins could be strong, boosted by the economic revival of China.