SMM: the recent weak performance of the gold market has not affected the confidence of the bulls, the market is still optimistic about the gold price rebound to continue to rise.
(Capital Economics) of Capital Macro said in its latest report that it is optimistic that the gold price will rise by the end of the year.
Samuel Burman, a commodities economist at the bank, said gold prices were expected to rise to $2000 an ounce by the end of the year, raising expectations for the first $1900 an ounce since then and rising to $2100 an ounce next year.
The gold market tumbled last week, falling below $1850 an ounce, its worst performance since March.
The rebound in the dollar index weighed on gold's performance, which was dragged down by a large number of lower assets across the market.
But Burman pointed out that the downturn in real interest rates will eventually affect the performance of the dollar, pushing up the price of gold.
Since gold itself does not yield, the performance of real interest rates means how attractive gold is. Real interest rates in the United States have continued to fall in recent months. "
The bank said it expected gold prices to fluctuate higher by 2021 because of lower real interest rates.
The Federal Reserve has indicated that it will not raise interest rates for a long time, which is undoubtedly very good for gold.
"Real interest rates will fall this autumn as markets have an impact on rising inflation after the US economy recovers."
The bank believes that nominal interest rates in the United States will be 50 basis points by the end of this year and will remain at that level for the foreseeable future.
In addition, Burman pointed out that investors will also seek to avoid risk, because the impact of the epidemic on the U. S. economy is still very large, so gold will also benefit.
"if the epidemic is not brought under control soon, then the demand for gold ETF will rise further, which will further push up the price of gold."
