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Sprott Asset Management said gold is in a “new bullish phase” after hitting another record high, echoing predictions from other analysts that gold prices will continue to climb to new highs.
“Gold has entered a new bullish phase, driven by central bank buying, rising U.S. debt and a potential peak in the U.S. dollar,” Paul Wong, market strategist at Sprott Asset Management, wrote in a report. A new record of $2,700 per ounce.
spot gold Currently trading at $2,729.14 per ounce, while gold futures Price is $2,741.20.
“Rising U.S. debt-to-GDP ratios have historically led to higher gold prices due to concerns about debt sustainability, currency devaluation and debt monetization,” Wong continued.
this U.S. Congressional Budget Office estimates public debt It will rise from 98% of GDP in 2023 to 181% of GDP in 2053, which is the highest level in the country’s history.
Huang explained that as debt increases, the government may print money to cover the deficit, which may lead to currency devaluation. The erosion of trust in fiat currencies has enhanced gold’s appeal as a reliable store of value.
Gold price year to date
He added that persistent inflationary pressures and difficult macroeconomic conditions plague the global economy, suggesting that central banks and investors are more likely to allocate precious metals.
According to data from the World Gold CouncilIn the first half of 2024, central banks’ net purchases of gold increased to 483 tons, 5% higher than the record set in the first half of 2023.
A growing number of analysts are unanimously predicting that gold prices will continue to rise to $3,000, with some expecting gold prices to exceed $2,800 within the next three months.
Michael Widmer, commodities strategist at Bank of America, said gold prices “are looking better now than ever before.” “I think we’re close to £3,000.”
Widmer cited rising government debt levels and brewing geopolitical uncertainty as reasons for his optimism.
Israel and its rivals Hamas and Hezbollah have pledged to continue fighting in Gaza and Lebanon, dampening hopes for a solution. Ongoing conflicts in the Middle East.
Rising geopolitical tensions typically cause investors to flock to safe-haven assets such as gold as they look to buffer against risk and instability in global markets.
Citi analysts also insist that gold prices will hit $3,000 within the next six to nine months. Gold prices should rise if oil prices surge due to recent escalations in the Middle East, they added.
Citi said gold prices have performed “very well” despite lower retail demand in China over the past three months, reflecting buyers’ willingness to pay higher prices.
Meanwhile, Commonwealth Bank of Australia’s Vivek Dhar said in a note on Monday that he expects gold prices to average $3,000 in the fourth quarter of next year due to “continued dollar weakness.”
However, Dhar said he expects gold prices to average $2,800 this season. Citi recently upgraded their view, also predicting gold prices will hit $2,800 within three months.
