Commerzbank And Citi Bank Are Bullish On Gold For Medium Term
The highly anticipated Fed meeting is just around the corner, and the market is expecting a pause in the rate hike. For big institutions such as Commerzbank and Citi, that's one of the reasons to stay bullish on Gold (XAUUSD).
According to these institutions, the gold market must be bullish for the medium to long term. This comes at a time when the yellow metal is undergoing choppy price action amid the upcoming uncertainty.
Gold's Price Forecast: $1965 Per Ounce
In the near term, Citigroup expects the gold prices to be around $1965 (average) per ounce. Citigroup has recently turned neutral on gold by raising its earlier target ($1915 to $2100 on average).
But despite being neutral, Citigroup mentioned that fresh bullish momentum could show up in the gold market over the medium term.
Commerzbank is also bullish on the gold on the grounds that Fed will not raise rates at the next meeting. They believe that Fed will change its course to avoid the credit's over-tightening. Based on these assumptions, the experts at Commerzbank believe that Gold prices will rise in the next few months.
The forecast set by Commerzbank for gold is around $2000 - $2050 on average during the 3rd and 4th quarters.
For now, the gold's contract (front month) on the NY's Comex is trading near $1978.60 per ounce after being up 1% for the day.
If we look at the Gold's spot price, it is trading near $1967 after being up 1.3% during the day. On a weekly basis, Gold is also trading at a 1% upside which is better than nothing.
Now that we have also seen an increase in the unemployment rate and the jobless claims, the chances of a pause in the Fed rate hikes have increased tremendously.
In addition, the available data suggests that the chance of a pause in the Fed's rate hike policy is now standing at 73.7%.