With the asset having a rather inconsistent start to the year, the Gold price is predicted to rise 10% in 2024 after Federal Reserve Rate cuts according to UBS. Indeed, the financial service company has noted that a Fed pivot could be the catalyst for the price to increase throughout this year.
However, the big question of when the Fed could begin cutting interest rates remains. The expectation of such cuts to take place in March has quieted in recent weeks. Still, the Swiss-based financial services firm is confident that the asset will respond bullishly to the development.
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Gold Price to Get a Boost From Fed Rate Policy Pivot
At the tail end of 2023, the price of gold went on a historical run. The metal saw its value skyrocket, reaching an all-time high price of $2135 in the middle of December. However, since the new year arrived, the asset has had a hard time continuing the bullish momentum it gathered during the final months of last year.
However, many expect that to shift in the coming months, especially one prominent financial services firm. Specifically, the gold price is expected to rise 10% in 2024 after a Fed rate cut according to UBS. The expectations align with an overall bullish outlook for the outlook performance of the firm.
Also Read: US Gold Prices Dip Amid Low Rate Cut Expectations
Altogether UBS predicted that the price of gold would reach the highest of $2250. Although that would not match the all-time high it reached last month, it would be the highest the asset has reached since its stark decline in December. UBS stated that the “power of the Federal Reserve’s policy pivot should not be understated.”
Moreover, they note that interest rate cuts in May would begin “putting pressure on the US dollar and real interest rates, which would spark fresh demand, particularly from exchange-traded gold funds.” However, the largest question of when these rate cuts could take place remains.
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The expectation at the end of 2023 was that March could begin the rate cuts. However, those predictions have slowly shifted. Although UBS expects May to be the starting point, Business Dialy has stated that the hawkish comments from the Fed indicate a likely start in Q3.
Still, how the asset performs until then will play an important role in deciphering how high it could reach after. Currently, Gold is trading at $2016, and is down 0.64% over the last 24 hours.