Since the beginning of March, the price of Gold has risen almost $150, that is, around 7%, reaching a new all-time high of $2,195 last Friday. Commerzbank strategists analyze the prospects for the yellow metal.
Mysterious fortress of Gold
In the absence of a convincing explanation for the rise in the price of Gold, we are skeptical that the precious metal can maintain its gains in the short term. In particular, If expectations of an interest rate cut in the US fade – for example, due to another strong inflation data in the US today – this could lead many investors to take profits, causing a downward correction.
However, not We expect Gold to fall back to late February levels on a sustained basis. This is because, in any case, we expected the price of Gold to rise in the medium term as a result of the change in interest rate trends in the US, which we believe will take place in June. This has likely already been largely priced in and the move has turned out to be stronger than we expected.
However, given that, unlike the market, we do not expect a pronounced cycle of interest rate cuts in the US, given persistent inflation risks, We believe that Gold's bullish potential is limited in the medium and long term. Therefore, we “only” increase our Gold price forecast for the end of this year and the end of next year from $2,100 to $2,200.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
