Goldman Remains Bullish; Gold Projected to Reach US$5,400

Gold prices continue to find strong support despite the Federal Reserve raising interest rates again. With spot gold hovering around the US$4,350 per troy ounce level, the outlook for the precious metal remains positive, as the market assesses that Fed rate hikes will not halt gold's long-term upward trend.

The bullish stance on gold remains intact following the Fed's decision to raise interest rates by 25 basis points and signal the possibility of further increases. While tighter monetary policy can exert short-term pressure on gold—driven by rising yields and reduced demand for non-yielding assets—much of this impact is already considered priced into the market.

Long-term projections for gold indicate continued upside potential. Gold is expected to climb toward approximately US$5,400 per troy ounce by the end of 2027. Meanwhile, the fair value estimate for the end of this year stands at around US$4,650 per troy ounce, remaining above current market prices.

A key factor underpinning gold is robust demand from global central banks. Central bank gold purchases remain a primary structural driver of the market, with buying volumes continuing to far exceed pre-2022 averages. This trend underscores gold's status as a strategic asset for navigating economic and monetary policy uncertainties.

Beyond central bank demand, gold is also supported by a growing need to hedge against macroeconomic risks. Uncertainty regarding interest rate trajectories, government policies, and geopolitical conditions encourages investors to maintain exposure to gold, even amidst high price volatility.

Newsmaker Analysis: The outlook for gold remains positive, though the path ahead is unlikely to be a straight line. In the short term, the Fed's continued hawkish stance and a potential strengthening of the dollar could cap gold's gains. However, if global central banks continue to expand their gold reserves and pressure on interest rates begins to ease, gold retains the potential to resume its upward trend over the long term. (arl)

Source: Newsmaker.id