CNBC: "Gold just hit a new all-time high; analysts believe the appreciation will continue"

The price of gold reached a new all-time high yesterday, with the spot price of the precious metal temporarily surpassing the $2,100 per ounce mark, and analysts expect the appreciation not to stop there, according to an article published by CNBC.

According to experts, geopolitical uncertainty, a likely weaker dollar and possible interest rate cuts by the Federal Reserve are elements that can fuel the ascent of gold to new historical records next year, while keeping it above the $2,000 level, the publication writes american.

According to CNBC, the price of the yellow metal rose for two months in a row as the Israeli-Palestinian conflict boosted demand for gold as a safe-haven asset, while expectations of interest rate cuts provided additional support to the price. In general, gold tends to perform well during periods of economic and geopolitical uncertainty due to its status as a reliable store of value.

"Anticipations of a pullback in the dollar and interest rates in 2024 are key positive factors for gold," Heng Koon How, head of market strategies, global economics and market research at UOB Group, told CNBC. In his opinion, gold can reach $2,200 per ounce by the end of next year.

Nicky Shiels, chief strategist at precious metals firm MKS PAMP, has a bullish outlook on gold. "There is less leverage now than there was in 2011," Shiels said, adding that the $2,100-per-ounce breakout puts the $2,200-per-ounce level in perspective.

According to Investing.com data, after reaching the maximum of 2,120 dollars, the spot gold quote started to fall, trading yesterday at 12:00 (Romania) at 2,074 dollars per ounce.

Bart Melek, head of commodity strategies at TD Securities, expects gold prices to average $2,100 in the second quarter of 2024, supported by central bank purchases.

According to a recent survey by the World Gold Council, 24% of all central banks plan to increase their gold reserves in the next twelve months as they have become more pessimistic about the US dollar as a reserve asset.

"This means more potential demand from the formal sector in the coming years," says Melek.

Also, a pivot in Federal Reserve policy next year is on the cards, the strategist also believes. Basically, lower interest rates tend to weaken the dollar, which makes gold cheaper for international buyers, thus boosting demand.

The Fed began raising interest rates in March last year as inflation rose to its highest level in 40 years, diminishing the appeal of gold. That's because higher interest rates hurt demand for gold, which doesn't pay interest, while assets like bonds become more profitable thanks to higher yields.

Late last month, Fed Governor Christopher Waller said he was considering easing policy if inflation data continued to fall over the next three to five months, prompting analysts to forecast a rise in gold prices. On the other hand, on Friday, Chairman Jerome Powell tempered market expectations of aggressive rate cuts, indicating that the Fed may have ended rate hikes for now, according to CNBC.

"We believe the main factors supporting gold in 2024 will be interest rate cuts by the Federal Reserve, a weaker US dollar and high levels of geopolitical tension," according to a recent note from research firm BMI Research, part of Fitch Solutions. the American publication also wrote.

Two weeks ago, Mark Newton, Managing Director/Global Head of Technical Strategy of the market analysis and strategy firm Fundstrat, was giving a $2,500 target for gold.

"The outlook for precious metals looks attractive given the decline in real rates (n.a. interest rates), growth cycles (n.a. metals) and geopolitical conflict," wrote the analyst, quoted by Business Insider, adding that it is not a target of price for the end of the year, but it is an "intermediate goal", according to Business Insider.