Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Gold still has upside, despite new record high - BofA Securities

Published 03/21/2024, 10:17 AM
Updated 03/21/2024, 10:17 AM
© Reuters

Investing.com - Gold prices climbed to a record high Thursday, but BofA Securities thinks more is still to come.

AT 10:05 ET (14:05 GMT), spot gold traded at $2,187.48 an ounce, having earlier climbed to a record high of $2,222.14, while gold futures expiring in April stood at $2,189.25 an ounce, just off a record high of $2,224.80.

These gains occurred after the Federal Reserve signaled that it was still considering rate cuts this year, hurting the U.S. dollar, a scenario that would boost gold, especially after rising interest rates dented the yellow metal over the past two years.  

BofA Securities still sees owning gold as one of its top trades for 2024.

Firstly, gold will act as a great hedge for stocks, the bank said, in a note dated March 20, with the metal having the lowest correlation to the S&P 500 of almost any asset class. It can thus act as a haven if inflation reaccelerates or growth slows later this year.

Secondly, central banks are buying at an unprecedented pace, purchasing more than 2,100 tons in the past two years, thus creating strong demand.

Finally, this is the third major gold rally in two decades, and the first two (2004-2011; 2015-2020) saw big inflows to gold ETFs. Households have tended to miss this rally, however, with total ETF gold holdings, a proxy for investor demand, having fallen by 25%.

If investors enter the market, this could help push the gold price to the bank’s potential long-term upside around $2500-$2600 an ounce.



Latest comments

Very good article. It explains very very well the gold rally. The only worries is the last sentence about prices USD2;500 and USD2.600, it brings to much risk of volatility, you guys could put some timing on it.  It is kind of, at any moment it can explode, don´t be in a bearish position.... never
I am worried about my investment because of alot of losses in forex
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.