Gold price gained some positive momentum on Friday. Thus, he ended his three-day streak. It also maintains its modest intraday gains. In this environment, economists at ANZ Bank remain bullish on gold.
“ Gold price will reach $2,120 in the first quarter of 2024“
Economists at ANZ Bank remain bullish. Accordingly, he forecasts gold to hit $2,120 in the first quarter of next year. According to economists, prolonged geopolitical tensions, such as between the US and China, will support central bank purchases as well as investment demand. Based on this, economists make the following statement:
Therefore, we maintain our bullish view, expecting prices to reach $2,120 in the first quarter of 2024. The risk to our bullish outlook may stem from the divergence between the actions of the US Federal Reserve, the Fed, and market expectations. Consensus forecasts are for rate cuts in 2023, but our basic forecast is that there will be no rate cuts in 2023. An unexpected policy action could trigger price corrections. However, such decreases should be perceived as buying opportunities.
Moderate decline in US dollar supports gold price
Cryptokoin.com’ As you can follow on the last day of the week, the US Dollar (USD) started to decline. This was due to the fact that the dollar bulls preferred to take some profit from the table after the last move, which reached the highest level in almost two months. This turns out to be an important factor that benefits the gold price in US dollars. However, a meaningful uptrend still looks elusive. The modest decline in the US dollar is more likely to ease with expectations that the US Federal Reserve (Fed) will keep interest rates higher for longer.
Indeed, Dallas Fed President Lorie Logan said on Thursday that economic data so far did not justify not increasing interest rates at the next policy meeting in June. What’s more, this week, many Fed officials have expressed concerns that inflation in the United States (US) is not cooling down fast enough. This is forcing investors to lower their bets on a rate cut later this year.
Confluence of factors limits gold’s gains
There is optimism that there will be an agreement this week to raise the US debt ceiling. This keeps US Treasury bond yields high. Also, this is in favor of the dollar bulls. On the other hand, it is possible for the gold price to limit the gains for the non-yielding gold price. It’s worth remembering that Kevin McCarthy, a prominent Republican member of the US Congress, said on Thursday that negotiations are in a better place and that a bill that would raise the government’s $31.4 trillion debt ceiling is expected to be discussed in the House of Representatives next week.
This helps ease fears that the world’s largest economy will default. It also increases the confidence of investors. Moreover, it is possible to understand this from the general positive atmosphere in the stock markets. The risk-off mood is likely to contribute to blocking a meaningful rise for gold. It also warrants some caution for bullish traders.
