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Gold joined the worldwide selloff in equities early this week however ought to regain its footing in an atmosphere of ongoing geopolitical uncertainties and expectations of rate of interest cuts within the U.S., ING commodities strategist Ewa Manthey stated this week within the financial institution’s month-to-month replace.
Gold continues to be up ~18% YTD, aided by central financial institution shopping for, Asian customers, and anticipated Fed fee cuts, and Manthey believes that after a consolidation section, gold will preserve its upward momentum.
Central financial institution shopping for power continues this yr, and whereas gross purchases and gross sales are decrease in comparison with the identical interval final yr, Manthey expects central financial institution demand will stay robust trying forward within the present financial local weather and geopolitical tensions and as costs retreat from file highs.
The analyst additionally famous that funds have continued their latest streak of constructive flows, as world gold ETFs have seen inflows for 2 months in a row following the strongest month since Might 2023.
Geopolitics will stay one of many key elements driving gold costs… [and] the U.S. presidential election in November and the long-awaited U.S. Fed fee lower may also proceed so as to add to gold’s upward momentum by means of to the top of the yr,” Manthey wrote, forecasting gold to common $2,380/ouncesin Q3 and peaking in This fall at $2,450/oz, leading to an annual common of $2,301/oz.
Entrance-month Comex gold for August supply (XAUUSD:CUR) ended the turbulent week +0.2% to $2,432.10/oz, however front-month August silver (XAGUSD:CUR) closed -2.7% to $27.487/ouncesfor the week; on Friday, gold rose 0.4% whereas silver settled flat.
ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (SIL), (SILJ)
Gold stays a powerful selection as a hedge amid turbulent geopolitics and battles with inflation struggling to maneuver ahead, SaxoBank’s Ole Hansen stated, in accordance with Dow Jones.
“We preserve a constructive view on gold as a diversifier hedge towards turmoil elsewhere,” Hansen stated, and “if the Federal Reserve begins slicing charges, doubtlessly as early as subsequent month, curiosity rate-sensitive traders might return to gold by way of ETFs.”
