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The Chief Investment Officer for the Americas at UBS had this to share:
“We see gold prices rising to USD 2,600/oz by the end of 2024 amid firm demand from central banks and a likely rise in activity from exchange-traded funds.”
So, why does that matter?
Well, if you’ve been following my trades you’ll know that I’ve been dabbling with gold some lately and, in fact, we put on a gold trade this past Friday that’s doing quite well.
And gold still has quite a bit of room to run. The next catalyst for gold is expected to be Jerome Powell’s press conference on Friday at the Jackson Hole Economic Symposium.
Investors are looking for any sign of a rate cut by the Federal Reserve next month.
And today, according to the CME FedWatch tool, there is a 71.5% chance the Fed will reduce rates by 0.25% at September’s FOMC meeting. Meanwhile, the likelihood of a 0.50% cut stood at about 28%.
On the gold front, the anticipation of potential rate cuts is what is driving investors toward gold as a safer asset.
In fact, gold-backed ETFs have now seen inflows for three months in a row as Wall Street and big banks begin preparing for rate cuts.
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