2024-04-17 07:19:37
Gold prices retreat after soaring! The deepening geopolitical tensions in the Middle East pushed up the price of gold, which reached US$2,407.8 per ounce on April 16 and fell back to US$2,372 this morning. Following Citibank’s optimistic view of gold prices at US$3,000, DBS Bank held its second quarter investment outlook meeting this afternoon (17th) and was asked whether gold is overheated? Chen Yujia, vice president of the Wealth Management Investment Consulting Department, said that he is still optimistic. This morning, the latest one-year target price was raised from the original US$2,250 to US$2,500. Although it is not as high as other banks, the trend is still positive.
Extended reading: Gold has risen so much that newcomers want to cry!Silver and gold prices soared to 9630 again, approaching the 10,000 yuan mark
After the price of gold soared, DBS Bank retreated and was still “on the long side” and revised its target price to US$2,500. Picture/retrieved from Getty Images (Anthony Bradshaw via Getty Images)
Federal Reserve officials were relatively hawkish last week, suppressing market expectations for an interest rate cut this year. In addition, after Iran retaliated against Israel, both sides maintained restraint in their external statements. Market concerns have subsided. Gold prices have also exceeded the $2,400 mark yesterday, and have been volatile. Later, the London spot gold price once fell to $2,372, showing a correction after rising.
DBS Silver raises gold target price from US$2,250 to US$2,500
DBS Bank (Taiwan) held an online press conference for the “Second Quarter of 2024 Investment Outlook” in the afternoon. During the meeting, Chen Yujia, Vice President of the Wealth Management Investment Advisory Department of DBS Bank (Taiwan), said that DBS’s latest gold report this morning was a re-evaluation. Regarding future performance, it is observed that gold buying will continue to be supported from central banks to general investors, including retail investors, especially under geopolitics. The original gold price target is US$2,250 per ounce, and the price in the next 12 months is raised to US$2,500.
Asked if gold has risen above $2,400, is it overheated? Any advice on investment operations? Chen Yujia said that the Gold Association estimates that the total stock supply is limited, and the current environment is relatively favorable for gold, and there is still a chance to perform, and it continues to be optimistic.
He mentioned that the gold reserve policies of various central banks have been dispersed into gold. For example, China has continued to increase its positions, accounting for nearly 5% of its foreign exchange reserves. Russia, Qatar, and Singapore have also taken similar measures. After emerging markets imposed sanctions on Russia, they are also considering increasing their gold reserves. Positions, these are deliberately allocated, and the foreign exchange policies of central banks are preparing for “de-dollarization”.
Gold ETF retail buying has not yet returned, but gold nuggets are rising
Regarding general investors, Chen Yujia said that although gold ETF buying has not returned yet, demand for gold bars and gold coins has increased. Once ETF buying returns in the future, it will basically support the continued rise of gold.
In particular, he reminded the two major counter-indicators of gold that despite the recent strength of the U.S. dollar and the rise in government bond yields, gold has not fallen. In the past, it should have been negatively correlated with the U.S. dollar and government bonds, showing that the market has become accustomed to the negative correlation and will still buy it when necessary. , when geopolitical wars heat up, investors still consider it a trustworthy asset. It is recommended that investors look at the U.S. dollar index and government bond yields for reference. Once the U.S. dollar weakens or yields fall in the future, it may continue to support the trend of gold.
Fed rate cut forecast lowered from 4% to 2%
In addition, Chen Yujia said that the Federal Reserve is expected to cut interest rates in the second half of the year (interest rates go down), which will further support gold buying. He also mentioned that although DBS’s target price for gold is not as high as that of banks such as Citigroup, only a little lower than US$2,500, the trend is still positive. Due to concerns over recent economic data and oil prices pushing up inflation to remain high, DBS Bank currently predicts that the Federal Reserve will reduce interest rate hikes in the second half of the year from the original four times of four times to two times of two times, and the rate cut is not expected until the third quarter. The first interest rate cut will be possible in July, and the next interest rate cut will not be until the fourth quarter. Only two interest rate cuts are expected this year. As for 2025, it is estimated that it will drop by another 4 sizes, and each season will drop by 1 size.
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Yahoo Finance special correspondent Ye Yiru: With more than 20 years of experience in mainstream financial media, from the Web1.0 bubble in 2000 to the Meta Yuanverse Web3.0, he has witnessed the rise and fall of Taiwan’s large and small business groups, and has experienced five international financial crises. We believe that finance is life and is everywhere. No matter how difficult financial knowledge is, we should explain it in a simple way. Everyone, young and old, should manage money. If you don’t manage money, money will not care about you.
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