“Gold has entered a new bullish phase, driven by factors such as central bank purchases, rising US debt and the possibility of reaching… The dollar is at its peak,” according to CNBC.
It is traded Gold prices Spot prices are currently at $2,729 per ounce, while US gold futures have reached $2,741.
“Historically rising US debt-to-GDP ratios have led to higher gold prices due to concerns about debt sustainability, currency devaluation and debt monetization,” Wong explained.
It is usually for monetization Debts An inflationary effect, which increases the supply of money in the economy, which can lead to higher prices and less value Currency.
The US Congressional Budget Office expects it to rise Public debt From 98 percent of GDP in 2023 to 181 percent of GDP in 2053, the highest level in the country’s history.
Wong explained that as debt increases, governments may resort to printing money to address the growing public debt deficit, which may lead to a devaluation of the currency. This erosion of trust in fiat currency enhances gold’s appeal as a reliable store of value.
“Inflationary pressures The continuing difficult economic conditions that global economies are experiencing, which have become more uncertain, indicate that central banks and investors are becoming more inclined to allocate their investments towards precious metals,” according to Wong.
On the other hand, it has revealed data World Gold Council A steady rise in net purchases of gold by central banks in the first half of 2024 reached 483 tons, meaning a growth of 5 percent compared to the previous record recorded in the first half of 2023.
A growing number of analysts expect it to continue Gold price Rising to $3,000 per ounce, as some expect the price of the yellow metal to exceed $2,800 in the next three months.
For his part, Michael Widmer, commodity strategist at Bank of America, believes that we are approaching $3,000 an ounce, adding that gold prices “look better now” than they have ever been.
Widmer cited high US and global government debt levels and growing geopolitical uncertainty as reasons for his optimistic forecast.
Also Geopolitical tensions Around the world between Ukraine and Russia on the one hand, and Israel and its opponents in the Middle East on the other hand, and the lack of prospects for diplomatic solutions have led to diminished hopes for reaching solutions to the conflicts and geopolitical tensions taking place around the world.
Rising geopolitical tensions usually push investors towards safe-haven assets such as gold, motivated by a desire to protect against risks and instability in global markets.
For their part, Citibank analysts stuck to their expectations that gold will reach levels of $3,000 per ounce in the next six to nine months. They added that if oil prices rise due to the upcoming escalation in the Middle East, gold is expected to rise.
Although low Chinese demand (at the retail level) over the past three months, but gold prices are still performing “very well,” which reflects buyers’ willingness to pay higher prices, according to Citi.
Meanwhile, Commonwealth Bank of Australia’s Vivek Dhar said in a note Monday that he expects the gold price to average $3,000 in the fourth quarter of next year as a result of “continued weakness in the US dollar.”
However, Dar said he expects the gold price to average $2,800 this quarter. Citi recently raised its estimates, also predicting that gold will reach $2,800 within three months.
