Investors are wondering whether the precious metal still has upside potential, and whether it is time to offload holdings or, alternatively, buy more.
The price of gold has reached new all-time highs several times this year. Following these sharp increases, investors are wondering whether the precious metal will continue to rise, and analysts seem to agree: still has a way to go.
This is explained by Chris Mahoney, head of gold and silver investments at Jupiter AM, who says that “Gold will continue to rise due to the enthusiasm of central banks, including the Bank of Spain”. He also sees a factor supporting prices in “possible rate cuts by the Federal Reserve.”
“It is likely that Gold price also benefits from easing of monetary policy by the US Federal Reserve. The main driver of the gold price is real interest rate expectations, with which it tends to move inversely. Lower interest rate expectations typically bring with them a higher gold price, so the impending change in Fed policy is positive for gold,” he said.
In the same vein, the market analyst of Kinesis Money Carlo Alberto De Casasaid: “If inflation figures are much lower than expected and hopes for a 50 basis point cut rise, then gold could hit record highs. But even if the consensus remains at a 25 basis point cut, gold would not experience a dramatic loss in prices as the Fed is definitely cutting rates.”
It should be noted that Gold hit an all-time high of $2,531.60 on August 20.
Traders see a 75% chance of a 25 basis point cut at the Fed meeting next week, and a 25% chance of a 50 basis point cut, according to the CME FedWatch tool, opens a new tab.
Source: Ambito
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