Is gold just a temporary pullback? Analysts exclaim: Gold prices hitting $2500 this year is not a dream!
Although gold has fallen back after hitting a record high, a commodity brokerage firm believes that gold prices will ultimately continue to rise. Commodity analysts at Sucden Financial said in a report released on Thursday that they expect gold prices to break through $2,500 per ounce by the end of the third quarter.
Time:
2024-07-27 09:03
Although gold has retreated after hitting a record high, a commodity brokerage firm believes that gold prices will ultimately continue to rise.
Commodity analysts at Sucden Financial said in a report released on Thursday, They expect gold prices to break through $2,500 per ounce by the end of the third quarter. Analysts said in their quarterly outlook:
“With strong physical demand, continued central bank purchases, easing inflation, and increased market volatility, the outlook for gold remains positive.”
Meanwhile, although silver prices have struggled amid the strong rise in gold prices, Sucden remains optimistic about silver. This week, silver even fell below the $28 mark.
Analysts said in the report, “We expect that the appeal of silver, as a safe haven asset and an important industrial metal, will increase. We expect silver prices to rise by the end of this quarter, exceeding $32 per ounce in the third quarter of 2024.”
Analysts said, The biggest factor supporting precious metal prices recently remains the market's expectation that the Federal Reserve will cut interest rates in September, which is consistent with the company's expectations.
While US economic growth continues to be resilient, declining inflationary pressures have given the Fed room to cut interest rates. According to the CME Group's FedWatch tool, the market almost fully expects the Fed to cut rates in September.
Analysts said, “Although the market has already priced in the rate cut expectations, but the actual policy decision will reassure investors about the future direction of interest rates, thereby promoting continued capital inflows 。”
Specifically, Sucden said, The rally in gold is expected to continue to be well supported due to geopolitical uncertainty driving actual safe-haven demand.
Analysts also expect that Central banks will continue to buy gold in 2024, even if the pace of purchases slows from record levels set over the past two years.
Looking ahead to silver, Sucden remains optimistic about silver because industrial demand continues to grow 。Analysts said, The artificial intelligence boom is transforming the global economy, which will require more silver.
Analysts said in the report, “The rapid development of generative artificial intelligence requires significant upgrades to existing infrastructure and hardware to support its widespread application throughout the economy. Advanced semiconductors, data centers, and consumer electronics will all see a significant increase in demand.”
They added, “In addition, the growth of AI-driven computing and power-intensive data centers will lead to a significant increase in electricity consumption.”
The International Energy Agency (IEA) expects that the electricity demand of data centers will exceed 1,000 terawatt-hours by 2026, which will be comparable to the total electricity demand of the whole of Japan, almost double the amount consumed by data centers in 2022. Sucden added, “This surge in industrial demand and increased electricity usage highlights the key role of silver, which could drive silver prices higher as the AI revolution progresses 。”
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