Gold: Safe-Haven Demand Amid Global Uncertainties Makes $3K a Possibility in 2024
- Gold has had a spectacular bull run this year.
- A pullback below $2,700 may signal a deeper correction amid election uncertainty.
- However, swift recovery suggests gold could eye the $3,000 mark by year-end
Gold: Safe-Haven Demand Amid Global Uncertainties Makes $3K a Possibility in 2024
- Gold has had a spectacular bull run this year.
- A pullback below $2,700 may signal a deeper correction amid election uncertainty.
- However, swift recovery suggests gold could eye the $3,000 mark by year-end.
Gold has experienced a nearly 4% increase in the past 10 days, bringing its year-to-date gain to an impressive 32%. This bullish momentum is particularly noteworthy in light of the fact that it is occurring in the context of a stronger U.S. dollar and increasing U.S. bond yields, which are generally unfavourable to gold purchasers.
The Middle East situation and the forthcoming U.S. presidential election have resulted in pervasive uncertainty, as evidenced by the recent upward trend.
Nevertheless, the session that concluded yesterday concluded with a decline of more than 1%, which may indicate a correction as a result of profit-taking.
Given the dynamic increases, it would not be unexpected to see a more substantial pullback, particularly as sellers consider potential support at the $2,600 per ounce mark.
Nevertheless, it appears that dip-buyers have instigated a robust recovery following the recent correction, with a view towards a $3,000 target by the end of the year.
What is the potential impact of the U.S. election on Federal Reserve policy?
Just prior to the Federal Reserve’s subsequent meeting on November 5, the United States will conduct its presidential election.
The anticipated 25 basis point cut, which is presently over 90% likely, is unlikely to be influenced by the election outcome. However, the Fed’s long-term strategies could be influenced by the newly elected president.
The economic policies of the candidates are still somewhat uncertain in the lead-up to the election. However, there are indications that Donald Trump may advocate for a more restrictive Federal Reserve posture.
His proposed tariff policy is to increase rates, which would inevitably exacerbate the pressure on imported products. On the other hand, the present trajectory of interest rate cuts, as depicted in the Federal Reserve’s dot plot, may be maintained if Kamala Harris prevails.
According to recent polls, Trump is gaining ground on his opponent, which has attracted the market’s interest and likely contributed to the U.S. dollar’s increase. This news may potentially dampen the spirits of gold bulls.
Gold: Is it probable that it will reach $3K in 2024?
Gold’s most recent ascent has attained new heights of approximately $2,750; however, the subsequent abrupt decline has prompted apprehension regarding anticipated future losses.
This downward trend could be confirmed by a decline below the $2,700 threshold, which would necessitate traders to reevaluate their positions in a changing market.
Traders should evaluate the $2,620 to $2,600 per ounce range as a potential entry point to engage with the upward trend at a more favorable price if this scenario occurs.
The psychological $3,000 level continues to be the primary medium-term objective for investors. There is a growing likelihood that the target will be achieved if the Federal Reserve indicates additional reductions later this year.
