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Strategist: Don’t be afraid to enter the market now if the price of gold reaches US$3,000

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Strategist: Don’t be afraid to enter the market now if the price of gold reaches US$3,000

Gold can be called the hidden horse among various assets in 2024. Since the beginning of March, it has consistently hit new highs, bringing the rise so far in 2024 to 11%. Senior strategists expect that in the most optimistic scenario,gold priceIt could rise to US$3,000 per pound or even higher.

There is no interest on gold,Rate of interestDeclines usually strengthen goldinvestAttractive, but the scenario of interest rate cut by the Federal Reserve (Fed) is facing uncertainty, which may prevent gold prices from rising. A research report issued by Commerzbank on the 3rd said: “We doubt that the Fed will launch a significant easing cycle, so the prospect of further rises in gold prices in the medium term is limited.”

But Rosenberg, founder and president of Rosenberg Research, disagrees. He boldly predicted that the price of gold may reach US$3,000 per pound or even higher in the future, and the driving force does not come only from the Fed.

“Given an easing cycle, global growth is weak and appears to be weakening, and inflation is in its final stages of decline, in our view, strong tailwinds will blow to lift gold prices,” Rosenberg said. New record high. ,

He pointed out that a series of bullish factors are favorable for the continued rise of gold prices, including: Central banks that neither like the Renminbi nor want to be overly dependent on the US dollar are buying gold. However, retail gold markets like India are strong. The pace of buying, and Western investors who have pulled their money out of gold ETFs, has yet to slow down. The lack of investment in commodities overall by many and large fund managers, as well as the tight supply of gold and geopolitical tensions, are all favorable to one. Rising trend in gold prices.

The senior strategist listed three possible scenarios and their corresponding gold price outlook, MarketWatch reported.

1. The economy has had a “soft landing” and global real (except inflation) interest rates have returned to the long-term average since 2000, causing a 12% decline in the US dollar. Then the price of gold is expected to increase by 10%.

2. The “typical” short market has arrived, interest rates have returned to the 2014-2024 average, and the US dollar has fallen by 8%. There may then be room for a 15% rise in the gold price, to around US$2,500 per pound.

3. Under the most optimistic scenario, the gold price will reach US$3,000 or more, which requires the cooperation of several conditions.

First, geopolitical tensions are rising. For example, Taiwan, the Middle East, the Russian border, the Korean Peninsula, Venezuela/Guyana, etc. are all “anticipated conflict sites”. Once a conflict breaks out, it could scare investors into fleeing to the gold market for safety.

Second, worsening financial conditions as well as interest rate shocks, such as increased corporate loan defaults, have increased corporate bond spreads.

Finally, repeated warnings about the deterioration in the US fiscal situation may also boost gold buying.

Furthermore, from a technical perspective, gold prices are also showing a bullish trend and are above the 50-day, 100-day and 200-day moving averages, indicating that the upward momentum is still accelerating. and the market outlook is still promising. ,

Rosenberg said: The conclusion for investors is simple: Any appropriately diversified portfolio should include gold, and for now, we are actively overestimating it not only as a hedge against geopolitical and fiscal risks. But operations can also provide a safe haven in case of a bullish trend. The stock market is falling, and prepare in advance for the upcoming easing cycle and a period of dollar weakness. Don’t be afraid to enter at current prices. ,

finance(tagstotranslate)gold price