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Goldman Predicts Gold Will Rise As Investors Bet On Rate Cuts.

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Goldman Predicts Gold Will Rise As Investors Bet On Rate Cuts.

(CTN News) – Gold prices surged on Monday, reaching their highest level in over six months. This increase was attributed to the weakening of the U.S. dollar and growing confidence among investors that the Federal Reserve will not raise interest rates further.

At 1:47 p.m. London time, spot gold rose by 0.52% to $2,012.39 per ounce, with a peak of $2,017.82 earlier in the day. Additionally, gold futures for December reached $2,018.9, marking the highest level since October 27.

The dollar index, which measures the greenback against major currencies, was down by 0.13%, reflecting market expectations of a more than 90% probability that the Fed will maintain rates at its upcoming two meetings.

According to CME’s FedWatch Tool, there is a 25% chance of a rate cut happening in March. Market analysts often associate a weaker dollar and reduced interest rates with an increase in prices.

Goldman Sachs analysts, in their recent analysis on the metals forecast for 2024, emphasized in a report that is expected to regain its shine.

According to their statement, the future increase in gold prices will be heavily influenced by the fluctuations in U.S. real rates and the value of the dollar.

However, they also anticipate a consistently high demand from consumers in China and India, as well as central banks purchasing to counteract any negative effects from unexpected economic growth or changes in interest rates.

Bank of America predicts gold will increase in value from Q2 2024 due to the Federal Reserve’s reduction of real rates. Lower real rates can decrease the value of the US dollar and increase the value of gold, a safe-haven asset during economic uncertainty.

Bank of America analysts believe this trend will continue for years, making a potentially lucrative investment. However, investors should do their own research and consult professionals before making decisions.

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