FOMO drives growing institutional interest in Gold
FOMO drives growing institutional interest in Gold
Gold surged to an all-time high of $2,740.37 per ounce on October 21, marking its 33rd record high this year and its strongest annual performance of over 31% since 2007.
Despite record-high prices, private investors have remained hesitant to liquidate their holdings. The fear of missing out on further gains and the need for portfolio diversification are now attracting significant investment flows into gold ETFs reflecting growing institutional interest in the metal.
Meanwhile, central banks remain net buyers of gold, although the pace of their purchases has slowed in recent months. Jewelry consumption has also declined, while mine production is on track to hit a record high in 2024, and gold recycling is expected to rise by 5%.
Analyst prediction on gold
Analysts are also forecasting gold to reach $2,800 by year-end. The Citi Research team has raised its three-month target from $2,700 to $2,800, citing potential deterioration in the U.S. labor market and the likelihood of Federal Reserve rate cuts. With U.S. interest rates expected to decline further, the non-yielding metal benefits as lower rates reduce the opportunity cost of holding gold. Citi expects rate cuts to continue driving gold's upward trajectory until the market gains more clarity on the endpoint of the Federal Reserve's rate reduction cycle.
In summary, gold's rally is set to continue as a confluence of geopolitical uncertainty, favorable macroeconomic conditions, and investor sentiment fuel its momentum. The $3,000 milestone is on the horizon and all eyes are on the next phase of rate cuts and global risk factors that could further propel the rise of the yellow metal.
Gold continues its 5th-day consecutive rally to unprecedented heights. From a technical standpoint, the momentum remains strong.
