Wall Street Predicts Higher Gold Prices
Ratings agency Fitch Solutions predicts gold prices to reach $2,075 an ounce “in the coming weeks” amid global financial turmoil. Wall Street Predicts Long-Term Rise in Gold Price
Gold prices could continue to rise, according to analysts surveyed by CNBC. They believe the potential for a new rise in the gold price is indicated by banking difficulties and a possible policy shift by the Federal Reserve.
“I think we are likely to see a strong move in gold over the next few months. The stars appear to be aligning for gold and it could soon reach new highs,” said Craig Erlam, senior market analyst at brokerage firm Oanda.
The expert explained that interest rates are currently at or near their peak, and amid recent developments in the banking sector, the market is betting on an earlier-than-expected start to rate cuts. He added that such a situation would boost demand for gold, even if the U.S. dollar were to weaken.
This month, rating agency Fitch Solutions predicted that gold prices could reach $2,075 an ounce “in the coming weeks” amid the global financial turmoil. The firm added that gold prices will remain above pandemic levels for the next few years; Craig Erlam confirmed this prediction.
Other Wall Street experts also predict a long-term rise in the gold price. For example, Tina Teng, an analyst at the British financial services firm CMC Markets, believes that a premature departure from the U.S. Federal Reserve’s policy of raising interest rates could lead to another rise in the gold price due to a weaker U.S. dollar and lower bond yields.
Nikki Shields, head of metals strategy at precious metals miner MKS Pumps, said, “Overall, the Fed will have to choose between higher inflation or a recession, and either option is favorable for gold.” She stated. She predicts gold prices will rise to $2,200 an ounce.
According to the World Gold Council (WGS), aggressive gold purchases by central banks have pushed gold demand to an 11-year high in 2022. Central banks purchased 1,136 tons of gold last year, the highest level in 55 years.
Randy Smallwood, CEO of Wheaton Precious Metals, said, “Continued central bank purchases of gold are a good signal of long-term price increases.” He stated. The expert predicts that a gold price target of $2,500 per ounce is on the horizon next year.
On March 20, the price of gold rose above US$2,000 for the first time since April 18, 2022, against the backdrop of the banking crisis in the U.S. and Europe and the plunge in financial stocks. These events may force the Fed to slow the pace of monetary policy tightening. According to experts, this will weaken pressure on inflation and create a positive backdrop for gold.