Gold prices surge past $2220/oz
Could be more upside, analysts say
Gold prices surpassed their record high this week, reaching past $2,220/oz after the Fed's press conference on Wednesday, which announced its expectation of three interest rate cuts for 2024.
Jerome Powell's statement that suggested inflation was moving down slowly, rather than hiking up, which was expected, had the knock-on effect of the gold price climbing from $2,155/oz on 20 March to spike to $2,207.43/oz the following day.
Gold prices have lifted 10% since mid-February and 20% from the year-low of $1,823/oz reached in October 2023.
According to the World Gold Council, gold demand fell to 4,448t in 2023, down 5% from 2022.
However, the body's Gold Demand Trends report stated that "when factoring in demand from the OTC markets and other sources, total demand climbed to a new annual record of 4,899t."
The WGC pointed to demand from central banks keeping demand high.
Looking ahead
"In addition to monetary policy, geopolitical uncertainty is often a key driver of gold demand and in 2024, we expect this to have a pronounced impact on the market."
"Ongoing conflicts, trade tensions and over 60 elections taking place around the world are likely to encourage investors to turn to gold for its proven track record as a safe haven asset," Louise Street, senior markets analyst at the World Gold Council, said at the release of the report.
Elsewhere, BMI said it expected the gold price to remain high.
"We are bullish towards gold prices for the coming months, with our Macro team expecting a total cut of 100bps in 2024 by the US Fed, the first cut to be made in June," the bank said in a report this morning.
Bank of America meanwhile said in a morning note that it thought the gold price could reach higher still, pointing to a possible $2,500-2600/oz price.
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