Gold Price Forecast :
Gold price hit an all-time peak on Tuesday amid growing investor confidence in an impending Federal Reserve rate reduction.
The gold price surged on Tuesday. Spot gold prices climbed above the $2,525 per ounce mark, and gold futures contracts for December delivery breached the $2,560 level.
A combination of record gold purchases by central banks in the first quarter and heightened geopolitical uncertainty has driven up gold prices in 2024, as investors flock to the precious metal as a safe haven.
Gold has been a standout performer in 2024, with prices surging over 23%. This has made it one of the year’s top-performing metals.
“We anticipate gold prices to climb even higher, reaching $2,600 per ounce by the end of the year,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management. Marcelli attributes this bullish outlook to strong central bank buying and the potential for increased activity from exchange-traded funds.
The upcoming catalyst for gold is anticipated on Friday, with Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium. Investors will be keenly observing for indications that solidify a potential rate cut by the Federal Reserve next month.
As of Tuesday, traders have priced in a 71.5% probability of a 0.25% rate reduction on September 18, while the likelihood of a 0.50% cut is around 28%, according to the CME FedWatch tool.
Investors are flocking to gold, with global physically backed gold ETFs experiencing three consecutive months of inflows. North American investors have led the charge in July, outpacing their European and Asian counterparts. Joseph Cavatoni of the World Gold Council attributes this trend to growing expectations of impending interest rate cuts.
Momentum is building in the gold market, acting as a tactical catalyst. This is correlated with a substantial net long position in the market.
This is the seventh time that gold has put an all-time high record since the beginning of April, and any time that occurs, we get profit takers.
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