Gold To Surge Towards 3k

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Gold To Surge Towards 3k

Gold (Xau/Usd) To Surge Towards $3,000 - Citi

According to analysts from Citi, gold (XAU/USD) will likely turn higher to $3,000/ounce. This forecast is based on the fact that financial flows favor an expansion in Gold prices.

The bank also added that the US labor market is showing signs of weakness. When we combine this with a weaker CPI and disinflation in the US economy, the odds of a dovish policy from the US Federal Reserve increase.

Fed Rate Cuts To Favor Higher Gold Prices

The overall environment is very bullish for Gold (XAU/USD) and Silver & which will translate into higher prices by the year-end (2024). In fact, Citi analysts believe that this will also help other metals such as Copper.

To add credence to their forecast, Citi analysts added that metal prices have turned higher due to Fed rate cuts in the past. So, it makes sense for the metals like Gold, Silver, & Copper to show similar price action this time.

13% upside was seen in the annualized prices of precious metals during the 6-months period following an interest rate cut from the US Federal Reserve.

They also added that the returns for the 12-month periods were 20% on average. So even if we take that into account, Gold can easily rise towards the $3K price level.

The research from the Citi Group also mentioned how the inflows into the Gold ETFs have increased. In June, the net inflows were positive, which makes it the first time in a really long time.

Even if we keep the Citi Group's forecast aside for a moment, the situation on grounds also hints at more upside for the Gold prices. At first, there's the softer CPI print which has basically confirmed the disinflation trend in the USA.

Furthermore, the chances of a rate cut from the US Fed have jumped to 90%, the highest levels seen in the recent past. Basically, it means the September rate cut is now a done deal unless we get a major surprise in the CPI print or the US NFP report.

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