24/05/2024 07:05 PM

KUALA LUMPUR, May 24 (Bernama) -- Gold prices are expected to reach US$2,500 per troy ounce (US$1=RM4.71) this year, fueled partly by strong demand from China, geopolitical uncertainties and the expectation of interest rate cuts by the United States Federal Reserve (Fed).

UBS Investment Bank precious metals strategist Joni Teves said physical demand in China in general, which has been quite strong at the start of the year, was a key factor that created a solid foundation for the market.

“There has been a combination of factors that supported gold prices and pushed prices higher. 

“We do think that gold can continue to make new highs over the the coming quarters. Given how we have recently reached US$2,450 per troy ounce this week, US$2,500 (per troy ounce) doesn’t feel that far away anymore, but we do think even to our base case forecasts, the risks are increasingly skewing to the upside,” she said.

Teves said this during the virtual media briefing on “UBS Asian Investment Conference Media Briefing Series: Oil and Gold - Will prices remain elevated?” today.

The price of physical gold stood at US$2,357.35 per troy ounce, according to the London Bullion Market Association’s afternoon fix on May 23.

Teves added that the UBS House viewed the Fed could start cutting rates in September.

“We have two cuts priced in for this year and to continue in 2025, (of which) I believe pretty much every meeting next year except for the November meeting. So, that is the current base case.

“In terms of gold price action in the near term, I think there is some room for consolidation, but I think the dynamic that we have seen where there is very strong interest to buy into dibs, and therefore, the market ends up being quite well supported.

“I think that is likely to continue. So, I think we are likely to see a continuation of the trend of higher highs and higher lows,” she added.


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