The gold price of $ 1,900 an ounce proved difficult to overcome. But analysts in the West, in terms of their technical positioning, expect greater growth in the second half of the year. Sookie Cooper, an analyst for precious metals at Standard Chartered, spoke about this.
At the moment, investors are less stressed than in the previous approach of gold to this level. This bodes well for further price increases in the second half of 2021. The previous time gold prices traded at $ 1,900, the fund's net length was 17% higher, the gold-backed ETPs were 4% higher (142 tons), and the investor position was much higher.
Gold failed to break through 1900
One indicator that Cooper pays close attention to is Exchange Traded Products (ETP). And the latest data suggests that the $ 1,900 level will prove to be strong resistance for a while.
For gold, there was a favorable macroeconomic environment with higher inflationary expectations, a weaker US dollar and a fairly moderate yield on US Treasuries, which kept prices high.
One of the biggest risks to gold price forecasts is the Federal Reserve's talk of price declines. Nonetheless, Standard Chartered believes the central bank will not provide anything new until the August symposium, which is slated to take place in Jackson Hole.
For gold, there was a favorable macroeconomic environment with higher inflationary expectations, a weaker US dollar and a fairly moderate yield on US Treasuries, which kept prices high.
One of the biggest risks to gold price forecasts is the Federal Reserve's talk of price declines. Nonetheless, Standard Chartered believes the central bank will not provide anything new until the August symposium, which is slated to take place in Jackson Hole.
Markets are currently expecting the first rate hike by March 2023, with all the attention focused on the upcoming June FOMC meeting.
As Cooper notes: Physical demand for gold also supports higher prices and the outlook for higher prices. Central banks, for example, remained net buyers for the second straight month, with a net purchase of 168 metric tons of gold since early 2021.
The latest data show a net purchase of 68.2 tonnes (t); this follows net purchases of 91 tonnes in March, helped by Hungary, which added 68 tonnes, tripling its gold reserves. While existing buyers such as Kazakhstan and Uzbekistan continued to increase their reserves in April.
As Cooper notes: Physical demand for gold also supports higher prices and the outlook for higher prices. Central banks, for example, remained net buyers for the second straight month, with a net purchase of 168 metric tons of gold since early 2021.
The latest data show a net purchase of 68.2 tonnes (t); this follows net purchases of 91 tonnes in March, helped by Hungary, which added 68 tonnes, tripling its gold reserves. While existing buyers such as Kazakhstan and Uzbekistan continued to increase their reserves in April.
Turkey, on the other hand, has been only a seller for the last five months. Thailand added 43.5 tons to its gold reserves.
China's trade data for April shows an improvement, with gold imports rising to 110.8 tonnes, up from 4.2 tonnes in April 2020.
In Switzerland, data for April confirms trends in India and China. Gold shipments to major physical centers rose sharply in April. Shipments to Hong Kong were the highest since January 2020 and China the highest since 2019. US and UK shipments climbed from low levels suggesting physical demand was the main driver in April.
China's trade data for April shows an improvement, with gold imports rising to 110.8 tonnes, up from 4.2 tonnes in April 2020.
In Switzerland, data for April confirms trends in India and China. Gold shipments to major physical centers rose sharply in April. Shipments to Hong Kong were the highest since January 2020 and China the highest since 2019. US and UK shipments climbed from low levels suggesting physical demand was the main driver in April.
Most likely, May data will show that physical demand has slowed, especially in India. But given the recent consumer appetite, the physical gold market is forecast to recover in the second half of 2021. Cooper noticed.
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