Thousand Ton Twist: Gold Buying Frenzy by Global Central Banks to Push Bullion Prices Higher
- Thousand Ton Twist: Gold Buying Frenzy by Global Central Banks to Push Bullion Prices Higher
by https://www.rt.com/
Gold prices could reach $1,400 per ounce in 2019 due to the US Federal Reserve’s less aggressive stance on interest rates, bullion purchases by central banks and lingering global uncertainties, market analysts explain.
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“I think that we expect gold to continue to trade pretty much within that range for the coming months,” said Martin Huxley, global head of precious metals at financial services firm INTL FCStone. “But over the second half of the year we expect it then to grind higher, and potentially it could test 1,400 towards the end of the year,” he told CNBC, referring to gold’s price per ounce in relation to the dollar.
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The yellow metal was trading at about $1,283.57 an ounce as of 09:19am GMT on Tuesday. According to Huxley, the Federal Reserve’s signal that there will be no more interest rate hikes this year has helped boost the outlook for gold and other metals.
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“The view is that there won’t be any interest rate rises this year, which again will be supportive for the precious metals sector,” he said.
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Metals expert Suki Cooper of Standard Chartered also said last month she expects bullion prices to move higher in 2019. “We expect gold to end the year on a strong note,” Cooper said, adding that it is “in the fourth quarter that we’ll see gold prices testing the highs that we saw in 2018 and 2017, and potentially matching the highs from five years ago.”
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Central banks have been accumulating gold at levels not seen in 50 years, as part of a broader diversification of reserves away from currencies including the US dollar. Their reserves surged 651.5 tons, or 74 percent year on year, in 2018, according to data from the World Gold Council (WGC).
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