Central Banks a Catalyst for $2,100/oz Gold – TDS


Share:

Analysts from Toronto-Dominion Securities (TDS) are out with a research note highlighting how healthy demand for Gold coupled with a future dovish twist from the Federal Reserve could see future Gold prices heading over $2,000 per ounce.

Early data on central bank gold purchases show that buying activity continued to be robust in September.

China once again has been on the forefront of central bank buying activity last month, by maintaining its record-setting pace set throughout the year. This, along with the eventual Fed pivot away from a hawkish stance, suggests gold is set to rally into the $2,100s.

Reporting shows that the People's Bank of China has purchased 26t last month, which lifted their reported 2023 buying to 181t... Since it started its aggressive buying last November, the PBoC has increased its gold reserves by 243t, and the precious metal now represents over 4% of its total foreign reserves. China’s official gold reserves now total 2,192t.

India’s central bank also made a big play in the gold market last month, with its largest single purchase in 15 months.

Central bank buying is likely why the recent higher interest rate-driven gold selloff, did not go through key supports slightly above $1,800/oz. 

We believe the official sector will continue to be supportive in the months to come and should be a catalyst for our $2,100/oz projection next year. These physical purchases will be very important when the Fed pivots to a less restrictive policy... The US central bank should pivot even as inflation is above target.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD trades firmer above 1.0800 ahead of Eurozone PMI data

EUR/USD trades firmer above 1.0800 ahead of Eurozone PMI data

EUR/USD is extending gains above 1.0800 in the European morning on Thursday. A broadly subdued US Dollar and US Treasury bond yields, amid a risk-on mood, are helping the pair ahead of the top-tier preliminary PMI data from the Eurozone and the US. 

EUR/USD News

GBP/USD trades with modest gains near 1.2650, awaits UK, US PMIs

GBP/USD trades with modest gains near 1.2650, awaits UK, US PMIs

GBP/USD posts mild gains to trade near mid-1.2600s in early Europe on Thursday. The pair is finding support from a weaker US Dollar and an improved risk appetite. All eyes now remain on the UK and the US flash PMI data for fresh trading impetus. 

GBP/USD News

Gold eyes a fresh uptrend on a sustained move above $2,035

Gold eyes a fresh uptrend on a sustained move above $2,035

Gold price has resumed its bullish momentum near $2,030 early Thursday, having paused its recovery rally on Wednesday. A risk-on market environment is acting as a headwind for the US Dollar, despite the hawkish US Fed January meeting Minutes.

Gold News

Sei price deviation below range high may mean only one thing for SEI holders – 18% crash

Sei price deviation below range high may mean only one thing for SEI holders – 18% crash

Sei (SEI) price has had a shocking and awe-inspiring rally over the past few weeks and has raked in 345% gains in the past two months. But the recent developments suggest SEI could be ready to slide lower.

Read more

NVDA Q4 results trounce consensus

NVDA Q4 results trounce consensus

Nvidia beat earnings consensus from Wall Street by a large margin on Wednesday, and the stock jumped more than 3% afterhours. Consensus had been $4.64 in adjusted EPS for the quarter ending in December, but Nvidia posted $5.16.

Read more

Forex MAJORS

Cryptocurrencies

Signatures