A famous American bank expects gold to reach this unprecedented level by Investing.com

Investing.com – With trading above $2,000 again for the first time since May and currently looking to continue rising, the possibility of gold reaching all-time highs, in 2024 or earlier, is increasingly likely.

In fact, the market expects the Fed to begin a cycle of interest rate cuts next year, and analysts at Société Générale in particular expect a total cut of 150 basis points next year (just as ING (AS:) analysts have predicted).

However, Saint-Germain believes that this situation will continue to support the price of the yellow metal since lower interest rates will benefit gold as a non-yielding asset, as it pushes more liquidity out of bonds and towards other markets, while geopolitical uncertainty prompts investors to look… About the safety of the world’s oldest store of value, causing prices to rise.

The bank noted that “unlike oil, it has risen by 8% since the start of the conflict between Hamas,” adding that “gold continued to ignore the rise in real yields, as demand remained strong.”

Société Générale Bank (EPA) also highlighted that one of the main sources of demand for gold and support for its price has been “southern central banks”, which have increased their gold reserves over the past few months.

In particular, the bank wrote: “In China, the metal has been one of the sources of diversification into real assets, along with oil,” stressing that “the heterogeneous alliance of the countries of the South should continue to eliminate dependence on and give new impetus to gold.”

With geopolitics weighing on markets, Société Générale analysts expect European stocks to remain cheap, at least “until signs of talks to end the war in Ukraine begin to appear.” However, these countries suffer from sticky core inflation.

Analysts also estimate that the conflict between Hamas and Israel could push to $150 per barrel “in the worst-case escalation scenario, given that the available spare production capacity is very high.”

However, these factors combined should act as a major support for gold in 2024 according to Société Générale analysts, who consider that the rise above $2,000 is just the beginning of a larger rally that could allow the yellow metal to remain near $2,200 per ounce during most of 2024.

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