Investors profit-taking leads to a drop in gold prices, ING predicts that the upward trend in gold will continue until the end of the year
Gold futures in the United States fell sharply on Monday as investors took profits, following a significant increase in gold prices last week due to expectations of a rate cut by the Federal Reserve. The decline in gold prices was supported by safe-haven demand, conflicts in Ukraine and the Middle East, and the high interest rate policy of the Federal Reserve, but optimistic expectations of a rate cut are increasing. The People's Bank of China has not increased its gold holdings for two consecutive months, waiting to buy after prices fall. Analysts at Morgan Stanley suggest that interest in gold may have weakened. ING analysts expect gold prices to continue to rise until the end of 2024
Smart Finance APP noticed that gold futures in the United States fell sharply on Monday as investors clearly took profits. Last week, the price of gold surged on expectations that the Federal Reserve might cut interest rates in September.
The near-month gold futures on the New York Mercantile Exchange fell by 1.4% in July to $2,355.20 per ounce, while the near-month silver futures fell by 2.4% to $30.618 per ounce.
Analysts at ING Group in the Netherlands stated that due to global geopolitical concerns and macroeconomic support for further gold price increases, the record-breaking rally in gold prices is expected to continue until the end of 2024.
ING mentioned that the rise in gold prices is mainly due to safe-haven demand, conflicts in Ukraine and the Middle East, and central bank buying with high interest rates maintained by the Federal Reserve. However, the optimistic sentiment towards rate cuts is increasing, with the Fed expected to cut rates for the first time in September.
ING indicated that in May, apart from China, central banks in various countries continued to buy gold, and future demand is expected to remain strong. They also mentioned that the global gold ETF flows turned positive in May.
In June, the People's Bank of China did not increase its gold holdings for the second consecutive month. Official data from the People's Bank of China showed that China's gold reserves remained unchanged at 72.80 million ounces at the end of June.
Nitesh Shah, a strategist at WisdomTree, said, "It seems that the price of gold is still a bit high, and the People's Bank of China is waiting for the gold price to fall further before resuming its gold buying plan."
Analysts at JP Morgan stated that open interest in gold increased by 9% last week, reaching a six-week high, but the increased interest in gold may have weakened