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Gold set to hit $2,300 by Sept end despite selling pressure

In the near term, gold price may consolidate in an upper-end range

Gold remained under some selling pressure for the third successive day on Monday while dropping to over one-week trough but analysts are expecting the yellow metal to continue its upward leap to hit $2,300 level by end of September 2024.

In the near term, they argue, gold may consolidate in an upper-end range following mixed global cues. The disappointing US inflation data has hurt expectations for a near-term US Fed interest rate cut, but the ongoing geopolitical unrest and weakness in the Eurozone and Chinese economies is expected to provide support to falling gold prices. Apart from this, global central banks across the world are buying gold, which may lend support to the yellow metal price.

Morgan Stanley expects gold prices going up to $2,300 per ounce in 2024, but price action is likely to be choppy as uncertainties remain over US data and rate cuts by the Federal Reserve.

Anuj Gupta, head — Commodity & Currency at HDFC Securities, said further escalation of geopolitical unrest, and political uncertainty, may fuel demand for gold in the future market while the US Fed interest rate is expected to dictate bullion prices in the near term. “In the medium to long-term perspective or say by the end of September 2024, I see the Comex spot gold price rally towards $2250 and $2300 levels,” said Gupta. Apart from this, global central banks across the world are buying gold, which may lend support to the precious yellow metal price.

Bas Kooijman, CEO and asset manager of DHF Capital, said a steady rise in gold value is expected worldwide in 2024 with prices slightly hovering above the $2,100 mark as the global gold rush continues while industry analysis points towards new record highs and moderate gains.

“Building on this momentum, most analysts predict an incremental increase in gold prices in 2025, a bolstering increase of up to 25 per cent in 2026, and a five-year forecast that points towards the $3,000 mark,” Bas said.

Bas explains why savvy investors in the UAE and wider GCC region should seize the moment to invest in gold to effectively diversify their portfolios. “For astute investors, knowing the differences between investing in and owning gold is essential. The UAE, particularly Dubai, provides a distinct advantage in the gold market by offering tax-free shopping and competitive pricing, making gold more accessible than in other global destinations. Regional investors are becoming increasingly aware of this, capitalizing on this convenient geography to diversify their portfolios; and we are seeing an influx of Bahrain-based investors follow this trend.”

Precious metal experts said any further decline in gold price, from a technical perspective, is likely to find some support near the $2,145-2,144 region, below which the price could accelerate the fall to the next relevant support near the $2,128-2,127 zone. The corrective slide could extend further towards the $2,100 round figure, which should act as a strong base for the yellow metal.

On the flip side, the $2,175-2,176 region now seems to have emerged as an immediate strong barrier, which if cleared should allow the gold price to challenge the record peak, around the $2,195 area touched last week. Some follow-through buying beyond the $2,200 mark will set the stage for the resumption of the uptrend witnessed since the beginning of this month, they said.

On why gold prices, the stock market, and bitcoin prices are moving in one direction, analysts explained: It is liquidity and momentum that is driving all three assets together. Separate factors like soaring demand for Bitcoin ETFs are another reason for bitcoin prices following gold prices and stock market trends.

They said these assets have often moved independently of each other due to their different characteristics and drivers. Gold is traditionally considered a safe-haven asset that is sought after in times of economic uncertainty or inflation. Stocks, on the other hand, represent ownership stakes in companies and are influenced by factors such as company earnings, economic growth, and investor sentiment. Meanwhile, bitcoin, a decentralised digital currency, has been touted as both a store of value and a speculative asset. However, in recent market conditions, observers have noted a surprising correlation between these seemingly disparate assets