FBS, a leading global broker that recently launched an enhanced FBS app, predicts that the price of gold will rise to $2,800 per ounce by the end of 2024. Financial market analysts at FBS have identified the critical factors behind gold’s uptrend and covered potential strategies to achieve it. CFD traders.
Gold is one of the assets characterized by stability and resilience in financial markets, which makes it an attractive instrument for investors. FBS analysts predict an upward trend for gold in the second quarter and through the end of the year. They associate the uptrend with significant buying by central banks, persistent inflationary pressures in the global economy and increased demand for gold from non-institutional investors.
Central banks around the world are actively adding to their gold reserves, signaling a strategic shift towards safer assets amid escalating geopolitical tensions. FBS financial market analysts point out that hedging and diversification of reserves have recently become typical of the People’s Bank of China, the Monetary Authority of Singapore, the Reserve Bank of India, the Central Bank of Turkey and others.
Inflationary pressures resulting from aftershocks of the global pandemic, military conflicts, rising oil prices and complications on major maritime trade routes are pushing gold prices even further. According to FBS analysts, inflationary pressures increase the appeal of gold as a hedge against currency devaluation and falling purchasing power.
Non-institutional investors are increasingly turning to gold as a store of value and means of portfolio diversification. Total demand for gold, including in over-the-counter markets, reached historic highs in 2023, fueled by economic uncertainty and changing investment preferences, notably in China.
Another critical factor affecting the increase in demand for gold is the interest of non-institutional investors. Financial market analysts at FBS report that total gold demand, including OTC markets, has reached a new annual high in 2023, at around 4,899 tonnes. FBS analysts suggest taking a closer look at the Chinese gold market, which is seeing a notable rise in demand, to better understand the current trend.
Taking a close look at the trajectory of XAUUSD on the weekly timeframe, FBS analysts highlight a bullish trend. Gold updated its ATH and the price is actively testing the resistance at $2,400, corresponding to 161.8 Fibonacci. If XAUUSD manages to break through this level, investors can expect gold to rise further to $2,800, which coincides with the Fibonacci level of 261.8. However, in case of a correction, the price could fall to the $2,200 support and then rally back to $2,800.
Regarding trading strategies, FBS experts emphasize the importance of prudent risk management in a bull market context. Strategies such as controlling position sizes, limiting commercial deposits to 2-10% of the total portfolio, and using stop-loss orders are recommended to protect capital and encourage diversification. These actions can be easily performed on the enhanced FBS app, which allows traders to capture market opportunities on the go, at any time. Additionally, FBS analysts recommend aligning with the dominant market trend and using technical analysis tools such as moving averages, RSI and MACD.
Disclaimer: This material does not constitute a call for trading, trading advice or a recommendation and is intended for informational purposes only.
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