Gold Prices to Continue Climbing Despite Fed Policy
(Kitco News) – Solid economic data and stubborn inflation will force the Federal Reserve to maintain its aggressive monetary policy through the summer, but that won’t stop gold prices from climbing higher, according to one European fund manager.
In a recent interview with Kitco News, Julia Khandoshko, CEO of the European brokerage firm Mind Money, said that gold’s rally to record highs is less about the actual timing of the Federal Reserve’s rate cuts and more about the general direction of monetary policy.
Anticipated Rate Cuts and Gold’s Appeal
While Khandoshko doesn’t expect the Federal Reserve to cut rates in June, she does see two rate cuts by the end of the year and further easing in 2025, which will create a positive environment for gold.
Additionally, Khandoshko pointed out that the government’s massive debt is another key factor providing solid support for gold, along with the potential easing from the Fed.
Gold as Safe-Haven Asset
Khandoshko emphasized that the rally in the gold market is not driven solely by speculation but is a reflection of underlying economic and geopolitical realities. Lower interest rates are positive for gold, but its ability to act as an alternative currency and reduce risks for investors also makes it attractive, she noted. In her view, gold prices may seem high at the moment, but the undervaluation of the dollar is a contributing factor.
Predictions for Gold’s Future
Looking ahead, Khandoshko anticipates that gold will eventually surpass $3,000 an ounce. Despite already holding above $2,300, she believes that further gains are on the horizon. The current price of June gold futures stands at $2,313.30 an ounce.
Potential for Gold-backed ETFs
Highlighting that gold has reached all-time highs even without significant interest from generalist investors, Khandoshko suggested that the next major rally for gold could occur when these investors move into gold-backed exchange-traded funds.
Fed Policy and Gold’s Outlook
While investors are currently focused on tech stocks, Khandoshko pointed out that if the Fed delays its easing cycle, equities may experience downward pressure, potentially driving interest towards gold as a safe-haven asset.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Insight: Including additional details about the potential impact of Fed policy on gold prices and the role of gold as a safe-haven asset can provide readers with a more comprehensive understanding of the factors influencing the precious metal’s value. By discussing the significance of gold-backed ETFs and highlighting potential scenarios where gold may outperform other assets, investors may gain valuable insights into potential market trends.
