The Federal Reserve’s hawkish stance on monetary policy is affecting the gold market. This causes Bank of America to lower its price forecasts for precious metals. The bank predicts that gold prices will average around $1,923 per ounce throughout the year. In addition, silver and platinum are also facing downward revisions. However, copper has the potential to outperform due to the green revolution and increased policy support in China. Let’s look at the details.
Bank of America downgrades gold price forecast due to Federal Reserve’s hawkish stance
Bank of America’s commodity analysts revised their price targets for precious metals. Accordingly, they lowered their annual average price forecasts for gold. Analysts say gold prices will average around $1,923 per ounce this year. It also predicts a drop of over 4% compared to its previous estimates.
The bank attributes this downward revision to the Federal Reserve’s hawkish stance on monetary policy. On the other hand, there are factors such as rising bond yields and a strengthening US dollar. These dynamics deter investors. It also causes a decrease in interest in gold futures and gold-backed exchange-traded products.
Silver and platinum face downside revisions
Bank of America’s outlook for silver is also bearish. Accordingly, the average price estimate dropped to $22.89 per ounce. Similarly, there is a significant decrease for platinum. Prices are expected to average $1,068 per ounce for the year. But the bank highlights the potential for silver to outperform gold when buyers return to the market. He also states that the green energy transition offers long-term support for the precious metal.
Bank of America’s commodity analysts downgraded all major metals in light of slow normalization of activity in China, tighter monetary policy and headwinds from the global manufacturing recession. However, they express optimism for copper, citing the green revolution as a driving force and increased policy support in China as factors that could boost the metal in the second half of the year. The bank also sees growth potential in molybdenum. Accordingly, it raises its price estimate to $24.40 per pound.
cryptocoin.com On the face of it, Bank of America’s updated price forecasts reflect the impact of the Federal Reserve’s hawkish stance on precious metals and base metals. Gold, silver, platinum and base metals are facing downward revisions due to various factors, including tightening monetary policy and global economic conditions. However, copper stands out as a potential top performer, driven by the green revolution and policy support in China. These revised forecasts provide insight into the challenges in the metals market in the coming months. It also provides insight into growth opportunities.
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