S&P Global drew attention to the developments that will affect gold prices. While he didn’t deny that the Fed’s rate hike expectations and energy concerns had an impact, he said fundamentals are no longer that important for precious metals. Here are the details…
The bank is now focused on gold rather than fundamental factors.
Aude Marjolin, commodities analyst at S&P Global, said that its precious prices are facing macroeconomic hurdles. Markets were hit in September as central banks became increasingly concerned about the possibility of a global recession. For this reason, major economies acted with significant interest rate hikes to combat inflation. The bleak macroeconomic picture for the coming year will be based on metals, not fundamentals. Consistently high inflation does not give the Fed an opportunity to change or pause its tightening course in the short term. Marjolin used the following statements in S&P Global’s latest price forecast:
The possibility of further rate hikes in November is on the cards if the Fed tries to hit the 2 percent inflation target rate. The European Central Bank and the central banks of Norway, Sweden and Switzerland also increased rates in September as inflation in the euro zone reached 10 percent.
What are the bank’s gold forecasts?
In the gold outlook, S&P Global is pointing to an average annual increase of 0.4 percent through 2026. They made a slight update to their consensus price forecast. Marjolin talked about the role of gold in the investment portfolio amid economic uncertainty and heightened geopolitical risks. S&P Global expects gold to hit $1,842 an ounce this year. cryptocoin.comAs we have also reported, gold is currently changing hands at $ 1,625.
It is expected to be $1,800 next year, $1,769 in 2024, $1,757 in 2025 and $1,753 in 2026. Marjolin pointed out that gold is in direct competition with the US dollar. That’s why the precious metal, with its safe-haven status, is the loser of the current macroeconomic environment, Marjolin said.
What’s next for other metals?
In the silver outlook, S&P Global has lowered its prices for the next two years. However, it raised its long-term forecast. The most recent consensus forecast is now for an annual average decline of 2.3 percent through 2026. “Despite the expected short-term weakness, the price of silver is expected to remain broadly stable through 2026. It averages $22.34 per ounce,” he said. S&P Global expects silver to hit $22.50 this year, $22.20 next year, $22.31 in 2024, $22.21 in 2025 and $22.47 in 2026.
“While most industrial activity is under pressure from the weakening economy, demand for silver will likely remain low and so will the price,” Marjolin said. Finally, price projections for palladium and platinum have been reduced by about 3 percent annually through 2026. S&P Global stated that the current macroeconomic environment weighs on price expectations for palladium and platinum.
