The US Federal Reserve (Fed) accelerated the pace of monetary policy tightening. This could bode well for gold.
Gold has traditionally been seen as a safe haven for investors in times of economic and financial uncertainty, but because holding gold doesn’t yield interest, the metal tends to lose its appeal. when interest rates rise.
The relationship between gold and interest rates this time has become complicated due to concerns that the US Federal Reserve (Fed) accelerates the pace of tightening monetary policy to fight inflation that may affect economic growth. economic chief. This could bode well for the yellow metal.
According to the latest survey of 31 analysts and traders, the average gold price for the period April-June 2022 will be at $1,920 an ounce.
That number is significantly higher than the $1,770 level in the January 2022 poll. The average price from the beginning of the second quarter to now is about $1,930 per ounce.
The main reason for the increase in the price of gold is the high level of inflation at the moment, as well as the war in Ukraine.
The average gold price forecast for the third quarter of 2022 will be $1,875, while the averages for 2022 and 2023 are $1,890.65 and $1,762.50 an ounce, respectively, compared with $1,775.55 and $1,653 forecast how here 3 months.
“Geopolitical risks could keep gold prices up in the near term,” said Standard Chartered analyst Suki Cooper.
However: “Over the long term, we expect the relationship between gold and yields to re-establish itself as the main driver of gold prices, causing the metal to trend lower, albeit lower.” compared to the post-rising high.”
The price of gold spiked above $2,000 an ounce in early March 2022, when Russia carried out a “special operation” in Ukraine, but then fell back to $1,850 an ounce.
Capital inflows into the dollar, another safe-haven, also reduce gold’s appeal to holders of other currencies.
“A strong U.S. dollar is certainly not good for gold and more rate hikes on the U.S. agenda are even worse,” said Frank Schallenberger, head of commodities research at LBBW. than for this precious metal”.
Analysts and traders forecast silver prices this year to be at $24/ounce, falling to $22.50 for 2023, compared with $22.96 and $21.80 respectively in the last poll. prior to.
Silver is also used as a safe-haven asset, in addition to being used by manufacturers of commodities including solar panels, cars and electronics.
“In our view, industrial silver demand remains relatively sluggish, as silver remains one of the few metals used in the industrial sector where demand is still relatively sluggish,” said Julius Baer analyst Carsten Menke. Demand has not increased rapidly in the past decade.
“We still see investment demand as the dominant driver of silver prices,” Menke said.