The markets’ eyes are on gold prices at the beginning of the week’s trading tomorrow, Monday, amid expectations of a jump in its prices after an attack Iran on Israel With hundreds of marches and missiles.
Gradual rise
Chief market strategist at Orbex, Asem Mansour, says that gold reaching its highest levels ever above $2,400 last Friday took into account the possibility of an Iranian response to the Israeli attack on the Iranian consulate in Damascus.
Gold prices recorded $2,431 per ounce during last Friday’s trading session, recording their highest level ever, before falling to $2,344 at the end of the session, after increasing tensions in the Middle East pushed investors towards safe havens.
US gold futures contracts increased 0.1% upon settlement to $2,374.1.
But Mansour expected, in an interview with Al Jazeera Net, that there would be a gradual rise in gold prices as a result of other factors that led to raising prices from the level of $2,000 per ounce to the current levels.
He ruled out any leaps as a result of the United States and Iran’s tendency to calm down in some way, after Tehran announced that its response had ended, while US President Joe Biden said that his country would not participate in any Israeli attack on Iran, which is considered a form of calm.
Mansour expects the price of an ounce of the yellow metal to reach between $2,500 and $2,700, and expectations will rise to more than that if the response and counter-response between Israel and Iran continues.
New levels
Meanwhile, analysts from Bank of America expect gold prices to continue rising, with speculation that it will reach levels of $3,000 per ounce next year.
This upward trend is due to:
- Geopolitical tensions.
- Strong demand from central banks.
- Possible interest reductions.
Ricardo Evangelista, chief analyst at Active Trades, said there is a possibility of a further rise in gold prices amid central bank purchases and with rising demand for assets considered safe havens with increasing concern among investors about the escalation of geopolitical conflicts.
He added that doubts about “the Chinese economy fuel concerns about the growth of the global economy, and this also leads to increased sentiment in the market, which tends to search for safe haven assets.”
Central banks
One notable factor behind gold’s rise is increased buying by central banks, with China adding more than 200 tons to its reserves in 2023.
This trend is coupled with increasing interest from Chinese retail investors, driven by instability in the local equity and real estate markets.
Federal Reserve Chairman Jerome Powell is expected to announce a US interest rate cut, which will boost gold prices (Getty)
Federal policies
Despite the rise in gold prices, the continued increase in interest rates by the Federal Reserve has made some investors cautious.
High interest rates usually reduce the attractiveness of gold, because they make yielding assets such as Treasury bonds more attractive.
However, recent shifts show investors returning to gold ETFs, perhaps due to fear of missing out on further price increases.
The prospect of lower interest rates could push gold prices further, although this is uncertain, amid mixed inflation data.
2024-04-14 14:24:46
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