Gold Price Forecast: The Road to $1,930
Gold prices are expected to extend their downside journey below $1,930 in the near term, as investors continue to sell the metal on expectations of more aggressive monetary tightening by the Federal Reserve.
The US central bank is widely expected to raise interest rates by 50 basis points at its next meeting in July, and some analysts believe that the Fed could even hike rates by 75 basis points. This would make gold less attractive to investors, as it would offer a lower yield than US Treasuries.
In addition, the US economy is showing signs of slowing down, which could also weigh on gold prices. The Federal Reserve Bank of Atlanta’s GDPNow tracker is currently forecasting that US GDP growth will slow to just 0.9% in the second quarter. This would be the slowest pace of growth since the first quarter of 2020.
Against this backdrop, gold prices are likely to remain under pressure in the near term. However, if the US economy does enter a recession, gold could start to appreciate as investors seek out safe-haven assets.
Here are some of the factors that could affect the gold price in the near future:
- The pace of monetary tightening by the Federal Reserve.
- The direction of the US economy.
- The level of inflation.
- The performance of other safe-haven assets, such as the US dollar and Treasuries.
Overall, the gold price is expected to remain volatile in the near term. However, if the US economy does enter a recession, gold could start to appreciate as investors seek out safe-haven assets.
In addition to the factors mentioned above, the gold price could also be affected by the ongoing war in Ukraine. The war has caused uncertainty in the global markets, and this could lead to increased demand for gold as a safe-haven asset.
However, it is important to note that gold is not a risk-free investment. The price of gold can fluctuate significantly, and investors could lose money if they buy gold at the wrong time.
Therefore, it is important to do your own research before investing in gold. You should also consider your risk tolerance and investment goals before making any decisions.