How do the world’s largest banks view gold’s prospects?
Bank of America has lowered its 2023 gold target: now analysts expect an average price of $1,923 an ounce as opposed to the earlier value of $2,009. The 4% decrease is due to the ongoing hawkish policy of the Fed and and the expectation of further interest rate hikes.
The bank’s report says that gold is unlikely to recover until the assets under management in this segment increase – and that, in turn, won’t happen before the Fed stops hiking the interest rates. Until then, the best we can expect from the gold market is stability – also because central banks keep increasing their gold reserves.
Meanwhile, the British HSBC bank also expects moderate growth at best. The key reason is weak investment demand from ETFs. HSBC analysts further believe that the supply on the side of gold mining and refinement will continue to grow. Considering the additional impact of the futures market, they expect the price of gold to go down slightly in the short term.
Finally, the Dutch Saxo bank points out that the price of gold has confirmed its support at $1,900. Saxo’s analyst Ole Hansen expects that weak economic data can lead to further upward movement. At the same time, he writes that the impact of ETF inflows on gold prices is limited, giving more weight to the demand by central banks and hedge funds, which should enter the market again after a period of net sales.
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