Gold rally may not be over yet, to peak at $2,450 in Q4, ING says (NYSEARCA:GLD)

Gold joined the global sell-off in equity markets earlier this week, but should regain its footing in an environment of continued geopolitical uncertainty and expectations of U.S. interest rate cuts, according to ING commodity strategist Ewa Manthey this week. The bank Monthly update.

Gold is still up about 18% so far this year, supported by central bank buying, Asian consumers and an expected rate cut by the Federal Reserve, and Manthey believes that after the consolidation phase, gold will maintain its upward momentum.

Central bank buying power continues this year, and while overall purchases and sales are lower than the same period last year, Manthey expects central bank demand to remain strong going forward given the current economic climate, geopolitical tensions and as prices retreat from record highs.

The analyst also noted that the funds continued their recent run of positive inflows, with global gold ETFs seeing inflows for two months in a row after their strongest month since May 2023.

“Geopolitics will remain a major driver of gold prices… The US presidential election in November and the long-awaited interest rate cut by the US Federal Reserve will also continue to add bullish momentum to gold through the end of the year,” Manthey wrote, predicting gold to average $2,380/oz in Q3 and peak at $2,450/oz in Q4, resulting in an annual average of $2,301/oz.

COMEX gold for August delivery (XAUUSD:CUR) ended a turbulent week +0.2% to $2432.10 per ounce, but silver in August (XAGUSD:CUR) closed at $2432.10 per ounce. -2.7% Gold rose to $27,487 per ounce during the week; on Friday, gold rose by 0.4% while silver remained flat.

Exchange-traded funds:New York, CA:GLD), (New York: California: GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (SLV), (PSLV), (SIVR), (sill), (sill)

Gold remains a strong hedging option. The global economy is struggling amid turbulent geopolitics and battles with inflation, said Ole Hansen of Saxo Bank, according to the Dow Jones Index.

“We maintain a positive view on gold as a diversified hedge against turbulence elsewhere,” Hansen said, and if the Fed starts cutting rates, perhaps as early as next month, interest-rate-sensitive investors could return to gold via ETFs.