The price of gold is shining, which predicts new bull markets, and Degussa, a European precious metals company, is raising its long-term gold price forecast.
In the latest research report published last week, Degussa's analysts announced that they are raising their gold price target to $1690 (which would mean about €49 per gram at the current exchange rate) per ounce by the end of 2020. They also see the price of silver rising to $23 per ounce at the same time (which is €0.66 per gram at the current exchange rate).
Currently, there is technical selling in the gold market as investors take profits due to the rise in gold prices to a six-year high last week. The price of silver reached nearly a two-year price peak last week. However, analysts remain optimistic about the upward trend in gold and silver prices, with current prices at $1500 and $17 per ounce.
December gold futures were last at $1505.80 per ounce, which is about one percent below the current price. Meanwhile, the September silver futures were last at $16.86 per ounce.
Analysts say that the threat of a global recession caused by the trade war between the United States and China keeps gold demand high. They also add that global monetary policy easing raises prices. They noted that the U.S. Federal Reserve's interest rate cut in July is a sign of a new phase of global easing, which the European Central Bank is expected to join next month.
‘’With interest rates at zero or even below, official currencies can no longer be considered a reliable store of value,’ analysts reported in their report. ‘With interest rates at zero or below and consumer and asset inflation continuing, cash and bank deposits are losing their purchasing power.’
Last week, the Governor of the Bank of Finland, Olli Rehn, stated that the European Central Bank plans to announce a significant easing package at next month's monetary policy meeting.
In the United States, economists and analysts expect that the central bank's chairman, Jerome Powell, will shift towards a new interest rate cut in September.
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