ING Group: Gold rally may not be over, Q4 expected to reach peak of $2450
Commodity strategists at ING Group predict that due to geopolitical uncertainties and expectations of a US interest rate cut, gold will continue to rise. Central bank buying momentum remains strong, and global gold ETFs continue to attract funds. It is expected that gold will peak at $2450 per ounce in the fourth quarter. Comex gold futures for August closed up 0.2% last week at $2,432.10 per ounce. Gold remains a strong choice for hedging against turmoil in other regions, and if the Federal Reserve starts cutting interest rates, investors may return to the gold market
According to the Zhitong Finance and Economics APP, Ewa Manthey, the commodity strategist at the Netherlands International Group, stated in the bank's monthly update last week that gold has recently joined the global market sell-off, but in the environment of ongoing geopolitical uncertainty and expectations of US interest rate cuts, it is expected to regain its footing.
Driven by central bank buying, Asian consumers, and expectations of Fed rate cuts, the price of gold has risen by about 18% so far this year. Manthey believes that after a period of consolidation, the price of gold will continue its upward trend.
The momentum of central bank purchases continues this year, although both total purchases and total sales are lower than the same period last year. However, Manthey expects that in the current economic environment and amid geopolitical tensions, coupled with the pullback from record highs, central bank demand will remain strong.
The analyst also pointed out that after experiencing the strongest month for global gold ETFs since May 2023, there have been two consecutive months of inflows, with funds continuing to maintain recent positive momentum.
Manthey wrote, "Geopolitics will continue to be one of the key factors driving the rise in gold prices. The November US presidential election and the long-awaited Fed rate cuts will also increase the upward momentum of gold until the end of this year." He expects gold to average $2380 per ounce in the third quarter and peak at $2450 per ounce in the fourth quarter, resulting in an annual average price of $2301 per ounce.
After a turbulent week, the nearby Comex gold futures for August closed up 0.2% last week at $2,432.10 per ounce, while nearby August silver fell 2.7% to $27.487 per ounce. On Friday, gold prices rose by 0.4%, while silver remained flat.
Ole Hansen of Saxo Bank stated that in the turbulent geopolitical environment and the challenging inflation struggle, gold remains a strong hedging choice. Hansen said, "We still see gold as a strong hedge against turmoil in other regions. If the Fed starts cutting rates as early as next month, rate-sensitive investors may re-enter the gold market through ETFs."