Gold is still locked in a narrow trading range and remains near a strong level of $1,800 per ounce. In general, precious metal prices have not recently shown significant volatility and are moving within wide consolidation ranges. The persistent high inflation and uncertainties associated with the pandemic deter investors from selling protective assets. Consolidation is likely to continue in the near term, and a 2-3% swing will limit the range price corridor.
The ECB and the Bank of China last week have already reaffirmed their commitment to soft monetary policy. The focus has now shifted to the Fed meeting. Market participants do not expect changes, but will look for hints about possible options for curtailing incentive programs and the timing of raising interest rates. Despite talk of the need for tightening policies, in the most likely scenario, rate increases are not expected before 2023.
According to Bank of America, outflows of gold in six weeks amounted to almost a billion dollars. At the same time, prices for another segment of protective assets – US Treasury bonds – were rising. At the same time, according to preliminary data from the International Monetary Fund, central banks actively continued to purchase gold in June and acquired more than 50 tons of precious metal.
In our forecast, we expect gold prices to rise by $1805, $1810 and $1820 per troy ounce.