Investing.com — Gold prices are expected to rise in the coming weeks, TD Securities said in a note, with steady buying by central banks and more clarity on U.S. interest rate cuts that will support the yellow metal.
TD said gold is likely to reach its average target of $2,475 per ounce in the first quarter of 2025. currently trading at $2,372.06 per ounce.
The yellow metal stalled this week after reports said the People’s Bank of China stopped buying gold for the second month in a row in June. This undermined gold’s rally last week, after softer-than-expected US non-farm payrolls data increased optimism about lower interest rates.
But TD said gold was encouraged by data showing the Reserve Bank of India, National Bank of Poland and Czech National Bank all buying gold this week.
TD said the central bank purchases, coupled with increased clarity on US interest rate cuts, were likely to support gold prices in the coming months.
“As it appears the official sector is still interested in using gold to diversify their currency reserves, greater investor acceptance as the timing of rate cuts becomes more predictable should see gold soar to new all-time highs,” wrote TD analysts in a note.
Spot gold hit a record high of $2,450.06 an ounce in May as increased demand for safe havens in the face of a possible conflict between Iran and Israel boosted the yellow metal. But the yellow metal spent little time at these levels, falling sharply to a low of $2.2800 an ounce before recovering in late June.
Spot prices are still up 15% so far in 2024, having also received support from growing bets on US interest rate cuts. The Federal Reserve is widely expected to cut rates by 25 basis points in September.
