By Sherin Elizabeth Varghese and Polina Devitt
(Reuters) – Gold prices are poised for a fresh run to record highs in coming months, with analysts revising forecasts up as geopolitical tensions, expected monetary easing and uncertainty around U.S. elections support demand, a Reuters poll showed on Wednesday.
Spot gold prices are up 16% so far this year after hitting a record high of $2,483.60 on July 17 with improved market confidence that the U.S. Federal Reserve would cut interest rates in September.
“Everything is acting in concert for gold,” said Neil Meader, director of gold and silver at consultancy Metals Focus.
“With the ‘buy the rumour, sell the fact’ attitude, some might be tempted to assume that the price could fall once the Fed starts cutting rates, but we are hearing that some investors will start buying the metal only when they see the actual rate cut,” he added.
The poll of 39 analysts and traders delivered a median forecast for gold at $2,300 a troy ounce for this year, with $2,387.50 forecast for the third quarter and $2,445 for the fourth quarter. Three months ago, a similar Reuters poll predicted prices would average $2,190 in 2024. [PREC/POLL]
While most analysts expect gold purchases by central banks to remain robust and gold exchange traded funds (ETFs) to see inflows, they are concerned about more price sensitive sectors of demand.
“Retail investor and jewellery demand for gold may remain price sensitive. With higher prices, this could be a weak spot,” said Nitesh Shah, commodity strategist at WisdomTree.
For silver, the poll forecast a median price of $28 per ounce in 2024, up from $26 estimated in the previous poll. Spot silver is currently at $29 an ounce, up 23% so far this year.
Analysts expect silver, both precious and industrial metal, to benefit from periods when gold gains momentum later in 2024, with support from a robust outlook for silver demand from the solar power sector.
(Reporting by Sherin Elizabeth Varghese in Bengaluru and Polina Devitt in London; Editing by Elaine Hardcastle)
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