The gold market is facing some tough times right now. It tried to stay strong at $2,400 an ounce but failed. One expert, Chantell Schieven from Capitalight Research, thinks it might drop even more this summer, maybe down to $2,150 an ounce.
But don’t worry too much! Schieven still believes in gold in the long run. She thinks it could bounce back by the end of the year, reaching around $2,500 an ounce. Right now, gold futures for June are down more than 2%, trading at $2,349.10 an ounce.
Schieven says one reason for caution is because interest rates might go up, making bonds more attractive and the U.S. dollar stronger. People are thinking the Federal Reserve won’t cut rates until after summer.
But here’s the thing: Schieven believes the Fed will eventually cut rates, maybe after the 2024 election. That could push gold prices up again. She also thinks inflation will play a big role in gold’s future. If inflation stays high and interest rates go up, gold might become more attractive as a safe investment.
And it’s not just about the U.S. economy. Global factors, like rising U.S. debt and geopolitical tensions, could also boost gold prices. Central banks might want to buy more gold instead of holding onto too many U.S. dollars.
Even with all the uncertainty, Schieven thinks gold is on the rise in the long term. She even suggests we might see gold prices go above $3,300 in the next 5-6 years. So, while things might be rocky now, there’s still hope for gold in the future.
