Gold Price Forecast: Potential Increase Due to Global Macro Uncertainty

Gold (CM:XAUUSD) has seen minimal movement over the past week, while silver (CM:XAGUSD) has experienced a 3.7% correction. Despite this, both metals have shown double-digit gains year-to-date, with silver benefiting from industrial demand, especially in the solar sector, and gold maintaining its status as a safe haven asset.

The Year of Elections

Looking ahead, the global macroeconomic landscape could favor gold in the coming months as 2024 shapes up to be the year of elections. With major elections in the U.K., France, and the U.S. on the horizon, political uncertainty may drive investors towards the safety of gold.

Global Headwinds

In addition to elections, ongoing geopolitical tensions in regions like Taiwan, Ukraine, the Philippines, and the Middle East are likely to further bolster gold prices. While central bank demand has been a key factor in gold’s performance, China’s reduced gold-buying pace could shift the focus to other drivers in the near future.

The Fed Factor

However, the U.S. Federal Reserve’s interest rate decisions will play a crucial role in determining the path of gold prices. With the Fed’s stance fluctuating between dovish and hawkish, today’s PCE inflation data could offer insights into future rate adjustments. Lower interest rates could make gold more attractive to investors, potentially leading to increased buying support.

Is Gold Bullish or Bearish?

Despite recent trends, the TipRanks Technical Analysis tool suggests a Buy signal for gold on a weekly timeframe. This signal indicates that traders might consider long positions on gold in the upcoming periods.

For more insights and analysis on commodities, you can explore the world of commodities on TipRanks.

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