An expert explained the rise in the cost of gold and predicted further price increases
- Новости
- Economy
- An expert explained the rise in the cost of gold and predicted further price increases
The cost of gold on the stock exchange rose amid expectations of interest rate cuts by the U.S. Federal Reserve System (FRS) and increased demand for the metal due to geopolitical tensions in the Middle East. In addition, the general weakness of the dollar supports prices, BitRiver financial analyst Vladislav Antonov told Izvestia on September 23. In his opinion, the cost could reach $2765 per troy ounce by the end of October.
Earlier in the day, the price of gold futures during trading on the Comex exchange reached an all-time high - rising above $2655 per troy ounce.
"The gold price is rising for several key reasons. First, expectations of interest rate cuts by the US Federal Reserve are playing an important role. The Fed has already cut the prime rate by 0.5 percentage points, which makes gold a more attractive asset compared to interest rate instruments," Antonov explained.
Secondly, he said, geopolitical tensions in the Middle East, especially the escalation of the conflict between Israel and Hezbollah, increases the demand for gold as a protective asset. In addition, the general weakness of the US dollar also supports gold prices as it becomes more accessible to holders of other currencies, the expert said.
"The last upward movement on gold began from the end of June, and so the trend started from October 2022 from the level of $1618. As for the forecast for the fall, I expect gold prices to continue to rise moderately with possible short-term pullbacks. Expectations of further Fed rate cuts, geopolitical uncertainty and a possible weaker dollar will drive gold prices and attractiveness. If the rate of growth of quotations will continue, we will see $2765 per troy ounce by the end of October", - added the analyst.
Antonov also specified that the gold market can be sensitive to unexpected economic data or changes in central bank policy. For example, if inflation in the United States begins to rise again or if the Fed decides to maintain a tighter monetary policy, it could limit the growth of gold prices. In addition, any significant improvement in the geopolitical situation could reduce demand for the precious metal as a safe-haven asset, the expert explained.
"Overall, despite possible short-term fluctuations, I expect the gold price to maintain its uptrend this fall, potentially reaching new record levels. However, investors should keep a close eye on economic indicators and geopolitical events that could affect gold price dynamics," the analyst concluded.
Earlier, on June 19, several Russian banks told Izvestia that the demand for gold among Russians has increased. It is stimulated, among other things, by the growing quotations for this precious metal, as well as the desire of investors to diversify their portfolio.
