In the conditions of increased geopolitical tension and forecasts of pressure on world economies, the price of gold continues to rise. The escalating crisis in the Middle East is not the only factor confirming the position of the precious metal as a safe haven asset. The decisions of central bankers on interest rates, as well as inflationary processes, will have an impact on gold movements this year.
What peaks in the price of gold are expected this year and will it break the psychological barrier of 2,200 USD per ounce.
They are rallying around the view that we can expect a good year for gold after the price broke the psychological barrier of 2,100 USD per ounce in 2023 and is now poised to test new levels.
In the past week, investors’ focus has been on reactions to the drone attack on a US base in Jordan, near the Syrian border, and President Joe Biden’s request that the US will retaliate against the attacks.
Continued attacks on ships in the Red Sea further focus market participants on the geopolitical crisis. However, investors in the precious metal also had their eyes on another event – the Federal Reserve’s (Fed) decision on interest rates after the two-day meeting and whether the Fed will maintain its tone.
Certainly, the geopolitical tension is not decreasing, moreover, new problems are being added in the Latin American zone, outside of the existing conflicts. Also, the US dollar is not particularly strong at the moment and we should keep in mind another important factor that central bank purchases are unlikely to stop in 2024. The National Bank of China has already made some announcements to increase the national gold reserve, which constitutes only 4% of China’s national reserve. I expect new highs in the price of gold at the level of around 2200-2300 USD per ounce.
The gold price peak of 2,135 USD per ounce in early December last year was expected by analysts, traders and experts.
