The price of gold is expected to recover and end the year higher at US$1,800 per ounce. — Reuters pic
Monday, 19 Sep 2022 2:01 PM MYT
KUALA LUMPUR, Sept 19 — The price of gold is expected to recover and end the year higher at US$1,800 (US$1=RM4.53) per ounce from the current US$1,670 per ounce on the back of a more stable market environment.
“It will reach US$1,800 per ounce by the end of the year. (Beyond that), the price of gold will (depend) on next year’s scenarios but it will not suddenly surge to the US$2,000 per ounce level,” said Singapore Bullion Market Association chief executive officer Albert Cheng.
The current rising interest rate environment, strong US dollar, as well as uncertainty in the trade and equity markets, have taken a toll on the price of gold, he added.
He said there are people who switched to gold in times of uncertainty, inflation, and financial calamity, but its high liquid asset feature compared with other asset classes, as well as bargain hunting activities, have contributed to gold’s downtrend.
“The strong interest rate environment will continue for a while, and the US dollar will continue to be strong because it is also considered a safe-haven currency, (as such) people will flock to the US dollar when there is uncertainty.
“So looking at the next six months, I think the price of gold will remain at the current territory but I do not think it will go too low,” Cheng told reporters after the relaunch of the gold futures contract on Bursa Malaysia Derivatives here today.
Cheng said it is hard to predict how the commodity will perform as the price of gold very much depends on the global geopolitical situation and whether the interest rate environment will stabilise or not.
However, he reckons that people will eventually get used to the market environment and that they will relook at their total portfolio and go back to fundamentals.
Cheng was one of the pane’lists at the industry panel discussion, titled “Is Gold a Safe Haven in a Volatile and High-Interest Rate Environment?”, in conjunction with the event. — Bernama