Summary:
Gold stagnates post-failure to break an all-time high in December. The US economy and inflation trump China's property concerns and wars.
Gold has been adrift after it failed to set a new all-time high at the end of December. A combination of robust economy and inflation in the US outweighs China’s property woes and ongoing wars.
UBS expects both gold and silver to climb higher in 2024 on expectations several Fed’s rate cuts are cast in stone. Strategist said bullion will hit $2,200 by the end of this year.
The bank is also optimistic on silver, expecting the metal to outperform gold after the Fed begins to ease. Silver has lagged behind gold in the last few years and hence ample room for playing catch-up.
That forecast broadly chimes with the latest survey from the LBMA where analysts see gold prices achieving a record annual price of $2059 and silver prices averaging the year around $24.80.
Global silver demand is forecast to reach 1.2 billion ounces in 2024, the second-highest level recorded, according to the Silver Institute. Stronger industrial offtake is a principal catalyst for the demand.
A possible rematch between President Joe Biden and his predecessor Donald Trump looms large in the election year. Maga 2.0 is, on any account, a great wild card for the Precious metals.
Trump said earlier this month that he would consider imposing a tariff upward of 60% on all Chinese imports if he regains the presidency. That would plague the global economy and reignite concerns about supply chain disruption.
In that worst-case scenario, gold is boosted and continues to overshadow its poor cousin which is more sensitive to industrial demand and macroeconomic scene.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The yen hit a seven-week high on Wednesday as delays to tariffs on Canada and Mexico eased concerns about the Fed's ability to cut interest rates.
2025-02-05
The Canadian dollar steadied after rebounding from multi-year lows, while the US dollar dropped as Trump paused new tariffs on Mexico for one month.
2025-02-04
Gold prices fell in early Asian trade as the dollar strengthened following Trump's new tariffs on Canada, Mexico, and China.
2025-02-03
