How will gold prices be in the coming weeks? What scenarios should investors prepare for? World famous strategists and analysts announced their predictions…
Capital Economics strategists: Gold will drop to $ 1,600 by the end of this year
Recent data highlight the strength of recovery in physical gold demand, particularly in India and China. However, Capital Economics strategists do not think this will have much impact on their forecast that the price of gold will decrease this year. Capital Economics strategists add the following to their statements:
Consumer demand has been historically strong after a period of falling prices, reflecting the price-sensitive nature of these purchases. The result is that consumer demand is much more responsive to changes in the price of gold (usually caused by external factors) than the price of gold responds to changes in consumer demand. Hence, the recent increase in consumer demand is a symptom of a lower gold price, rather than a reason to think that it will rise again. Part of the increase in India’s gold imports in March seems to be due to temporary factors that need to be eliminated rather than a long-term change. Considering the prospects for a reduction in gold import duties announced in February, imports may have increased due to seasonal stocking and delayed purchases from previous months. In any case, the alarming resurgence of virus cases in India will likely reduce demand for gold in the near term. The other two factors, such as the US real returns and the US dollar, are the much more important factors of the price, and we expect both to weigh on the price of gold next year or later. We think that the recent increase in long-term real returns in the US will soon continue and this will increase the opportunity cost of holding gold. Meanwhile, we also predict that a stronger US dollar will make gold more expensive for non-US investors. Gold will drop to $ 1,600 at the end of this year.
Credit Suisse strategists: Gold prices still have a short-term base
Gold (XAU / USD) has a short term basis and Credit Suisse strategists are seeing a new resistance test at $ 1,857. A horizontal US dollar, as well as rising US Real Yields, could see strength being limited here for now. Credit Suisse strategists add to their comments on the issue:
Gold prices still have a short-term bottom. We are looking for a potential rebound from the 200-day average and $ 1,857 / 79 to a downtrend to $ 1,835. However, a new limit is expected here for now. Going back below $ 1,724 / 21, the effort to build a foundation quickly comes to naught. If this current phase is still a correction in the wider market and the previous bull market behavior is to be repeated, it means there will be no new peak until December this year at the earliest. An eventual increase in US real returns will remain a windfall for gold.