Société Générale sees gold prices falling to $1,550 in 2023 and recovering to $1,900 by 2024 | kitconews gold silver finance preciousmetals markets mining investing |
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"Our U.S. rates strategists expect the Fed to stop hiking rates by the end of this year but real rates to remain well into positive territory until 3Q23 at least," the analysts said in their latest price forecast."Amid positive real rates in the U.S. and increasing ones in Europe, investors will likely shy away from non-yielding assets such as gold, and we expect a large 200t of outflows from gold ETF holdings.
Although gasoline prices declined by more than 10% last month, the report highlighted broad-based inflation in food, shelter and medical costs. "After 3Q23, gold's fortunes should reverse, as our economists expect a mild U.S. recession in early 2024 and sluggish E.U. and China growth. Investors are likely to hedge such risks by transferring part of their allocations to gold. At this point, we would expect the Fed to turn dovish again, with inflation somewhat under control albeit higher than before COVID," the analysts said.
"As real rates are expected to continue to rise and the geopolitical risk around the Ukraine war is getting increasingly digested by markets, we expect strong outflows to materialise to the end of this year, bringing the full-year net outflow to 50t. In fact, even after the expected 2022 liquidations, holdings should remain elevated at around 3,000t, some 50% above the five-year pre-COVID average.
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