Based on the growing expectations that the Federal Reserve is nearing the end of its latest tightening cycle, Greg Shearer, executive director of global commodities research at JPMorgan Chase, stated that by the second quarter of 2024, the Fed will begin cutting interest rates.
According to JPMorgan's semi-annual forecast, analysts believe the average price of gold will be around $2012 per ounce in the second half of the year.
By the fourth quarter of 2024, the average price of gold is expected to be around $2175 per ounce.
In the case of a recession, prices will continue to rise even further.
There is a 50/50 probability in the markets that the Central Bank will maintain interest rates in the range of 5.25% to 5.50% over the year.
According to many economists, gold will be sensitive to hawkish bias from the Federal Reserve in the near future.
As Shearer noted, although speculative positioning in gold has recently increased, trading activity is not yet very active because institutional demand remains, with central banks continuing to buy gold and countries increasingly hedging against heightened geopolitical risks, diversifying away from the U.S. dollar.
