By Asif Aydinli
In the first half of 2024, gold delivered the highest return among various investment instruments. Bank deposits, currencies, foreign currency bonds, real estate and even dividend stocks lagged behind the precious metal in terms of growth. Let’s take a look at the current situation in the gold market and the forecasts for the rest of the year.
The sharpest increase in the global gold price was recorded between February and April 2024. Over the past three months, gold has been trading in the range of $2,300 to $2,450 per ounce, with frequent fluctuations around the $2,350 mark, representing a deviation of 2 to 4%.
In rubles, the situation depends on the dynamics of the ruble-dollar exchange rate. Since mid-April, the ruble has strengthened by 10%, which has led to a corresponding decrease in the price of gold in rubles. On the Moscow Exchange, the price of one gram of gold fluctuates between 6,350 and 6,700 rubles, and at the end of July stabilized at around 6,500 rubles. Due to the volatility of exchange rates, significant price fluctuations are observed – up to 3% per day and more.
Most analysts make forecasts for the end of each calendar quarter. The current consensus forecast of Russian experts, according to Cbonds, is $2,400 per ounce by the end of the year, with a projected dollar exchange rate of 94.2 rubles. This corresponds to a price of 7,270 rubles per gram and indicates potential growth of 12%.
Foreign analysts, based on Bloomberg data, expect a lower gold price – about $2,340 per ounce, at a dollar rate of 92.2 rubles. This means that a gram of gold could be worth 6,940 rubles, an increase of 7 percent.
On the futures market, gold is traded in the form of futures contracts, both in dollars (GOLD contracts) and in rubles (GL and GLDRUBF contracts). The most liquid futures contracts expire in September, but trading in December contracts is already actively taking place.
Traders trading dollars generally have a pessimistic forecast: 70% of retail investors are shorting the metal through GOLD contracts against the dollar. At the same time, ruble futures GL and GLDRUBF show a significant accumulation of bullish positions – 55-70% of all positions are long, which indicates a bet on a weakening of the ruble (strengthening of the dollar) rather than on gold as an asset.
Analysis of historical charts shows that gold often enters a long-term correction after reaching historic highs. The metal starts trading in a wide sideways corridor and then shows a decline.
In the absence of new drivers, this scenario could repeat itself and gold could lose at least half of the gains made in the first half of the year. The support level of $2,070 per ounce, which gold has tried unsuccessfully to break through several times in the last five years, could be decisive. A correction to this level would result in a fall in the gold price in dollars of 11 percent.
In rubles, however, the situation could be different. If the dollar rate stays in the range of 90-95 rubles per dollar, gold would lose about 5% of its value. If the exchange rate rises to 95-100 rubles per dollar, gold could see a 2% increase in value.
Since mid-April, the price of gold in dollars has been depreciating and continues to decline in rubles due to the ruble’s strengthening. Most analysts expect the price of gold to recover and grow by the end of the year. Forecasts for the end of December 2024 range from $2,340 to $2,400 per ounce, which corresponds to 6,940–7,270 rubles per gram and indicates a growth potential of 7–12%. Traders are betting on a decline in the price of gold in dollars and a rise in rubles, expecting currency fluctuations. Technical analysis indicates a possible 10% correction in the price of gold, but this decline may be less noticeable in rubles due to the dollar’s strengthening.
These conclusions will help investors better understand possible scenarios for the gold market in the coming months and make informed decisions regarding their investments.
News.Az
