Gold: Consumers key to further rises toward $2,300 – ANZ


Gold continued its march higher through July, with the spot price hitting a record high of $1,981/oz earlier this week. Strong safe-haven demand, falling yields, rising inflation expectations and a weak USD have all contributed to this move. However, further gains are reliant on investor demand, with consumer demand showing no signs of recovery. All in all, strategists at ANZ Bank see the yellow metal trading at $2,300/oz on a 6-to-12 month view.

Key quotes

“There is no doubt that the backdrop remains highly constructive, with negative real yields for the foreseeable future. We have subsequently revised up our 6-to-12-month target to $2,300/oz. Even so, we are mindful that if economic sentiment improves in coming quarters, the hurdle for continued growth in investor demand may make the path to this level an arduous one.”

“Bond yields and short-term interest rates should stay low in nominal terms and negative in real terms for the foreseeable future. This will continue to minimise the opportunity cost of holding zero-yielding gold. The expansion of the monetary base also re-kindles inflationary concerns.”

“We see geopolitical risks rising. US-China tension and Brexit talks are ongoing, while Middle East conflicts persist. This should keep safe haven demand strong.” 

“The supply of USD and the scale of macro liquidity have the potential to keep the USD weaker. As a result, the current trends across our dashboard of economic indicators driving gold investment demand are all positive.”

 

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD weaker ahead of RBA’s monetary policy decision

The Aussie is weak, despite receding dollar’s demand and the robust performance of US indexes. Coronavirus developments hit the commodity-linked currency ahead of the RBA.

AUD/USD News

Gold: This just might be as good as it gets for gold

The price of gold is trading at $1,975 within a range of between $1,960.54 and $1,986.76 at the time of writing, virtually flat on the day in consolidation having eeked out a fresh all-time high.

Gold News

USD/JPY struggling to retain the 106.00 level

The USD/JPY pair traded as high as 106.46 on Monday but struggles to retain gains above the 106.00 level amid lack of dollar’s demand.

USD/JPY News

Ethereum on its way to regaining $400 while BNB hit a new high at $22.5

BTC/USD is more stable than other coins right now but has been able to recover from its crash towards $10,500. It is currently trading at $11,369 and faces very little resistance until $14,000.

Read more

WTI drops below $40 on demand worries, OPEC+ output increase

Crude oil prices posted losses last week and seem to be struggling to shake off the bearish pressure on Monday. As of writing, the barrel of West Texas Intermediate (WTI) was trading at $39.85, losing 1.5% on a daily basis.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures