Gold prices are expected to climb again, supported by several factors that counteract weakening safe-haven demand and reduced expectations for Federal Reserve rate cuts this year, according to a report by Gulf News on Wednesday.
The report highlights renewed upward momentum in gold, driven by a bullish outlook and robust buying, especially from China. This strong demand is pushing prices higher.
Notably, investment bank JP Morgan forecasts gold could reach $6,000 per ounce by 2029, coinciding with the end of U.S. President Donald Trump’s current term.
Despite near-record gold prices, China’s imports surged to their highest level in nearly a year last month. The country’s central bank reportedly eased import restrictions to meet this rising demand, with shipments jumping 73% month-on-month to 127.5 metric tons.
Meanwhile, two senior Federal Reserve officials—New York Fed President John Williams and Vice Chair Philip Jefferson—maintained a cautious “wait-and-see” approach. Their stance has led market observers to believe a rate cut in June is unlikely. Higher interest rates typically reduce gold’s appeal since it is a non-yielding asset.
Earlier this year, gold soared to a record high of $3,500.05 per ounce on April 22 amid global uncertainties. Although prices eased afterward, partly due to cooling U.S.-China tariff tensions, gold remains up over 20% year-to-date. This gain is largely driven by significant inflows into gold-backed Exchange Traded Funds (ETFs) and increased speculative demand in China.
On the currency front, the U.S. Dollar marked its fourth consecutive weekly gain last week as traders responded to diminishing risk appetite and awaited further signals from the Federal Reserve. A stronger dollar typically weighs on gold prices.
