Gold price is forecasted to hit $2,000 in the second quarter

In the first quarter of this year, the price of gold increased by more than 6% and achieved its best gain since the third quarter of 2020. The same positive scenario is expected to continue into the second quarter, with a target of $2,000 an ounce, said Frank Cholly, senior market strategist at RJO Futures.

“Gold has tended to consolidate a lot before the rally. We had a nice rally from February to mid-March. Now, gold is going through a brief correction,” he said. forecast, if the precious metal price quickly surpasses the $1,950-1,975 mark, the target of $2,000 an ounce will soon be established.

After a good growth in the first period of the year, the price yellow started the new quarter with a trading session down 30 USD only on April 1, to 1,925.6 USD an ounce. However, analysts who are closely monitoring the yields on the 2-year and 10-year US Treasuries say that gold prices still have a lot of room for growth.

Last week, part of the US Treasury yield curve inverted. This is a situation in which the interest rates of short-term bonds (2 years) rise higher than the rates of long-term bonds (10 years) and is often seen as a sign that investors are worried. concerned about the near future rather than the long term.

“The widespread 10-year Treasury yield inversion this week has led to speculation the Federal Reserve is likely to raise interest rates,” said Paul Ashworth, chief economist at Capital Economics. quickly pushed the US economy into a recession”.

The war between Russia and Ukraine is expected to continue to have a great influence on gold price movements. “Safe-haven flows call for gold,” said strategists at TD Securities. precious metals rest in peace as a safe haven”.

Recently, the Russian government decided to tighten the purchase of gas, requiring buyers to open ruble accounts in banks of this country. According to OANDA senior market analyst Edward Moya, President Putin’s decree puts Europe in a difficult position and increases the risk of greater inflationary pressures.

“Gold remains the option and poised to rally ahead of the latest move by Russia. The precious metal will find major resistance at the $1,970 mark, but if that isn’t a critical hurdle, the path leads to it. $2,000 mark may appear,” this expert forecast.

The outlook for gold remains positive for the rest of the year, but Bloomberg Intelligence suggests combining the precious metal with Bitcoin to achieve the best results.

“The possibility of a recession in Russia, a high probability of a recession in Europe, China and possibly the US will boost gold’s performance against most assets for the year. But if not combined with As digital assets are growing, gold will just act like an old fashioned janitor,” suggested senior commodity strategist Mike McGlone.

Meanwhile, DailyFX strategist Michael Boutros noted that technical factors point to gold not yet breaking out. The future could see more sell-offs ahead for the precious metal, especially if the $1,828-1,849 level fails to hold. According to him, gold’s story will be balanced by the pace of Fed rate hikes and the difficulty of prices falling below that level.

Xiao Gu (according to Kitco News)