Gold Prices Predicted to Reach $3,500

Gold Prices Could Surge to $3,500 Amid Central Bank Buys

According to the latest forecast by Standard Chartered, the price of gold per ounce could reach $3,500 within the next 6-12 months, mainly due to central bank purchases. On Monday afternoon, the precious metal stood at $3,356.77, which marked a 1.29% decrease. In Dubai, 24-carat gold traded at 406.75 dirhams per gram, while 22-carat was at 376.75 dirhams.

The bank states that central banks' reserve diversification remains the main driving force. Although purchases have temporarily slowed following the recent price increase, the process has not yet concluded. Expected lower U.S. interest rates and increased demand for safe-haven assets during market volatility could further support the price.

A survey from the World Gold Council shows that 76% of global central banks surveyed believe that the gold share in world reserves will be higher within five years, compared to 69% from the previous year. Currently, gold's proportion is around 18%, which was only 11% in 2018. The process of reducing dependence on the U.S. dollar favors gold the most, as central banks in emerging countries have significantly increased their gold purchases.

Gold's role is dual: partly as a hedge against inflation and geopolitical risks, and partly as a symbol of financial stability. According to Standard Chartered, the impact of tensions in the Middle East may be limited on short-term gold price increases, but in the long term, it remains an important strategic hedging asset. The forecast raised the three-month target price to $3,400, while the 12-month prediction remains unchanged at $3,500.

(Source of the article: According to the latest forecast by Standard Chartered bank.)