Forecasts for gold prices continue to come. Today we will try to include estimates from four giant banks. Let’s take a look at the estimates.
What do Commerzbank economists say about gold prices?
Gold price fell to its lowest level in two months this week. However, it has recovered significantly over time. The Fed is now likely to interrupt the rate hike cycle in mid-June. On the other hand, a new interest rate hike is not completely off the table. This means control for the gold price.
Central banks are planning to buy more Gold after record purchases last year, according to a survey by the World Gold Council. Central bank purchases do not mean an increase for the gold price. But it will help prevent any drop in prices.
Credit Suisse expects a drop
cryptocoin.com Credit Suisse strategists, whom we have covered before, analyze the metal’s technical outlook for gold prices. According to them, falling below $1,938 will make a return to $1,893 possible. Gold stabilized last week after holding above the 100-DMA at $1,938. That’s not an average we typically follow. But it did put the market on the ground during the February downturn earlier this year. However, we emphasize that the significant resistance at record highs of $2,063/2,075 recorded in 2020 and 2022 will pose a formidable hurdle given the grueling short-term momentum picture. We also think that the triple bearish momentum divergence will still continue. This suggests that the most likely outcome for now is more range price action. We believe that after this stage, the market will eventually reach new record levels.
If gold prices rise above $2,075 on a weekly closing basis, it will mean a significant breakout. Therefore, it will clear the way for a move towards our next key upside target of $2,330/2,360. Conversely, a break below $1,938 will lead to a return to $1,893.
UOB Group expects this level
Gold prices had reached a record high of $2,072. However, it lacks momentum as can be seen on the daily MACD. Therefore, this situation does not indicate a positive outlook. However, spot gold has the potential to rally further to the top of the ascending wedge near $2,100 before the risk of a ‘reversal’ increases. If gold dips below $2,020, it will most likely test $1,963. Spot gold didn’t just drop below $2,020 in the middle of last month. It also broke $1,963. It fell further on Tuesday (May 30, 2023) to $1,932.
This low appears to have slightly broken the ascending trendline that combines both the 21-week exponential moving average and the lows of October last year and March this year. The price action coupled with the weekly MACD turning negative (as of last week) shows that there is an increased risk of a downtrend reversal. However, gold prices must break support below daily Ichimoku, currently at $1,920, before weakening towards $1,870 (the current level of the 55-week exponential moving average). The risk of a clear drop below $1,920 for spot gold prices will continue over the next month unless it rises above the top of the daily Ichimoku cloud currently at $1,992.
UBS expects rise for gold prices
Gold prices are on track to break their all-time high this year. Gold fell below $1,950 last week amid progress in the U.S. debt ceiling deal and repricing prospects for a U.S. rate hike. But Gold has a role as an effective long-term hedge. This therefore makes the yellow metal valuable in a portfolio context.
There is strong central bank demand. In this context, there is a weakening of the US dollar and an increase in recession risks in the US. These situations mean a rise for Gold prices. That’s why we’re going to hit an all-time high this year. We also continue to believe it will reach $2,250 by June 2024.
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