CIO believes the rally in gold has more room to run over the next six to 12 months, as investment demand continues to pick up amid elevated central bank purchases. (UBS)
Separately, central bank gold demand picked up in July, with the latest data from the International Monetary Fund and the World Gold Council showing 37 metric tons of gold added to foreign reserves.
Our view: We believe the rally in gold has more room to run over the next six to 12 months, as investment demand continues to pick up amid elevated central bank purchases. We expect a step-up in exchange-traded fund (ETF) inflows as the Fed starts to cut interest rates in September, forecasting gold to reach USD 2,700/oz by June next year. Against the backdrop of heightened macro and geopolitical uncertainties, we continue to recommend an allocation of around 5% to gold in a well-diversified US dollar-based portfolio as a hedge.
Main contributors: Solita Marcelli, Mark Haefele, Vincent Heaney, Jon Gordon, Daisy Tseng
Original report: Weak data and tech worries drive equity selloff, 4 September 2024.
