S&P Global drew attention to the developments that will affect gold prices. While he didn’t deny that the Fed’s rate hike expectations and concerns about strength had an impact, he said fundamentals are no longer as valuable for precious metals. Here are the details…
The bank is now focused on gold rather than fundamental factors.
Aude Marjolin, commodities analyst at S&P Global, said that price-to-pay prices are facing macroeconomic turmoil. Markets were hit in September as central banks increasingly worried about the prospect of a global economic calm. The analyst has therefore moved in with precious rate hikes for the major economies, inflation effort. The bleak macroeconomic picture for the coming year will be based on metals, not fundamentals. Invariably, high inflation does not give the FED an opportunity to change or pause its tightening course in the short term. Marjolin used the following terms in S&P Global’s latest price cut:
The possibility of further rate hikes in November is on the cards if the Fed tries to meet the 2 percent inflation target rate. The European Central Bank and the central banks of Norway, Sweden and Switzerland also increased rates in September as inflation in the euro zone reached 10 percent.
Where are the bank’s gold claims?
On the gold outlook, S&P Global is pointing to an annual average increase of 0.4 percent through 2026. They made a slight update to their consensus price assumptions. Marjolin talked about the role of gold in the investment portfolio amid economic uncertainty and heightened geopolitical risks. S&P Global expects gold to hit $1,842 an ounce this year. Koindeks.comAs we have also reported, gold is currently changing hands at $ 1,625.
It is expected to be $1,800 next year, $1,769 in 2024, $1,757 in 2025 and $1,753 in 2026. Marjolin pointed out that gold is in direct competition with the US dollar. That’s why the precious metal is the loser of the current macroeconomic environment with its safe harbor status, Marjolin said.
What’s next for other metals?
On the silver outlook, S&P Global has lowered its prices for the next two years. But it raised its long-term forecast. With the latest consensus, the assumption is now declining by an average of 2.3 percent annually through 2026. “Despite the expected short-term weakness, the silver price is expected to remain broadly stable through 2026. It averages $22.34 per ounce,” he said. S&P Global expects silver to hit $22.50 this year, $22.20 next year, $22.31 in 2024, $22.21 in 2025 and $22.47 in 2026.
“Demand for silver will likely remain low and so will the price, while industrial activity is under pressure from multiple weakening economics,” Marjolin said. Finally, price claims for palladium and platinum have been reduced by about 3 percent annually through 2026. S&P Global stated that the current macroeconomic environment is weighing on price expectations for palladium and platinum.