Gold price with breathing space
The gold price has recently returned below the USD 1,500 mark. This morning at 11 a.m., the troy ounce of gold on the spot market cost 1,484 US dollars. That was equivalent to 1,345 euros. A consolidation of precious metals is underway. The markets are hoping for an improvement in the economic situation and rising share prices – also due to the new liquidity offensive of the central banks. What influence do recent developments have on banks’ gold price forecasts?
Commerzbank analyst Karen Jones expects that the recent setback to 1,459 US dollars will provide the basis for the next major rise in the share price. This would result in a long-term price target of 1,690 to 1,704 US dollars. A rise above the resistance level of 1,515 US dollars would initially open up the chance of a return to the annual high of 1,557 US dollars.
The British Standard Chartered Bank expects the next big jump in the gold price to be initiated by an increase in investment demand. “Although ETF positions and tactical investments have already reached an elevated level, we believe that it will be private investor demand that will drive the gold price higher in the next stage. Private investors want confirmation of further rate cuts and equity market weakness before they go into gold,” said Suki Cooper, the bank’s precious metals analyst. The average price forecast for the fourth quarter is 1,510 US dollars per ounce. A year later, according to analysts’ estimates, 1,570 US dollars could then be reached.
In a recent analysis, Swiss Credit Suisse came to a similar conclusion. Global economic risks and the low level of interest rates encouraged a fixed gold price. The price is therefore expected to rise to USD 1,600 in the first half of 2020. This year, the price is expected to rise again to USD 1,550. “It seems that both the US and China are still a long way from a genuine trade agreement and that economic data are weakening. We continue to expect the Fed to cut interest rates by 25 basis points in October, as global weakness and uncertainty in trade policy persist,” it says.
Analysts at the major British bank HSBC expect the exchange rate to rise to USD 1,555 by the end of the year. For 2020, the highest exchange rates of 1,605 US dollars are expected. A global easing of monetary policy, the lowest interest rates and geopolitical risks are expected as supporting factors for the gold price.
Citigroup raw material strategist Aakash Doshi provides a somewhat longer-term outlook. He expects the gold price to reach 2,000 US dollars per ounce in the next one to two years. Based on the current price level, this would correspond to an increase of 34 percent. As positive influencing factors he cites permanently negative real interest rates, the dangers of a global recession, increasing geopolitical risks, high stock and bond valuations and the strong demand for gold on the part of central banks and private investors.