The Federal Reserve is widely expected to cut interest rates a little later today (Wednesday) but don’t expect that to stint gold gains as analysts predict we’ll be seeing $1600 per ounce as early as April.
In a new briefing, global investment bank, Goldman Sachs says no matter what rate cuts emerge, there is enough uncertainty on the political stage to support a new bull run. It says, “Combined with CB [central bank] gold purchases related to de-dollarization, we maintain our bullish gold target of $1600/toz despite a potential easing in policy uncertainty.”
Its stance is echoed by Suki Cooper, a precious metals analyst at Standard Chartered who says, “The gold market appears to have priced in a 25bps rate cut in October, but a hawkish Fed cut could help to sustain the USD 1,500/oz level… Uncertainty around UK elections, Brexit and the Middle East is keeping gold in focus.”
The bottom line? Take full advantage of any short-term lulls while you can as buying now will leave you in a very strong position as 2020 approaches.