Commodities and Futures News

XAU/USD: Citi expects physical gold demand to rebound, maintains $3,000 target

2024.07.10 08:19

XAU/USD: Citi expects physical gold demand to rebound, maintains $3,000 target

Physical gold demand likely softened in the second quarter compared to the first, although “off a very strong base,” Citi analysts said in a Tuesday note.

The Wall Street behemoth notes that underlying gold consumption growth is still trending positively for 2024, potentially driving spot trading towards a record average price range of $2,400-$2,600 per ounce in the second half of the year “as financial investors play catch-up.”

Non-monetary gold imports into China decreased to a robust 137 tons per month in the second quarter from an unprecedented 189 tons per month in the first quarter. Citi continues to project a record 1,750 tons of onshore bullion imports in 2024, marking an 18% year-on-year increase and an eightfold rise from the 2020 pandemic levels.

“If our assessment is accurate, Chinese retail gold imports would represent 47% of world gold mine output in 2024, versus a 2021-2023 average of 34% and a 2017-2019 average of 36%,” the analysts state.

Meanwhile, official sector gold demand has stabilized at a record 28-30% of gold mine production since 2022, with the potential to increase towards 35% in a bull case scenario over the next year due to trade wars and concerns about US fiscal policies, Citi said.

Analysts model a record ~1,100 tons of central bank gold buying in 2024, a 5.8% year-on-year increase, with the possibility of exceeding 1,250 tons in a bullish scenario.

Moreover, inflows into gold exchange-traded funds (ETFs) should also improve in the second half of the year as the Federal Reserve begins its rate-cutting cycle, Citi added.

“We remain constructive on gold physical uptake over the next 12 months with a potential Fed cutting cycle and US labor market headwinds buttressing paper demand for the yellow metal,” the bank’s analysts wrote.

Their base case price targets for gold are $2,800-$3,000 per ounce by mid-2025, representing a 10-20% increase versus the forwards.



Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 64,914.39 1.65%
ethereum
Ethereum (ETH) $ 3,464.26 1.21%
tether
Tether (USDT) $ 1.00 0.20%
bnb
BNB (BNB) $ 576.99 0.57%
solana
Solana (SOL) $ 162.03 3.73%
usd-coin
USDC (USDC) $ 1.00 0.19%
staked-ether
Lido Staked Ether (STETH) $ 3,463.67 1.81%
xrp
XRP (XRP) $ 0.579792 8.16%
the-open-network
Toncoin (TON) $ 7.34 2.74%
dogecoin
Dogecoin (DOGE) $ 0.126075 3.83%
cardano
Cardano (ADA) $ 0.440486 0.65%
tron
TRON (TRX) $ 0.133881 3.14%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 4.35%
avalanche-2
Avalanche (AVAX) $ 28.76 5.13%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 64,914.39 1.86%
polkadot
Polkadot (DOT) $ 6.37 0.66%
chainlink
Chainlink (LINK) $ 14.32 1.42%
bitcoin-cash
Bitcoin Cash (BCH) $ 389.70 0.46%
near
NEAR Protocol (NEAR) $ 6.18 8.75%
uniswap
Uniswap (UNI) $ 8.20 3.38%
litecoin
Litecoin (LTC) $ 72.94 2.14%
leo-token
LEO Token (LEO) $ 5.85 0.03%
dai
Dai (DAI) $ 1.00 0.17%
pepe
Pepe (PEPE) $ 0.000012 17.38%
matic-network
Polygon (MATIC) $ 0.548514 2.26%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,617.18 1.91%
internet-computer
Internet Computer (ICP) $ 9.53 1.22%
kaspa
Kaspa (KAS) $ 0.181741 0.07%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.45 6.84%
ethereum-classic
Ethereum Classic (ETC) $ 23.68 1.61%
ethena-usde
Ethena USDe (USDE) $ 0.999161 0.21%
aptos
Aptos (APT) $ 7.11 5.32%
stellar
Stellar (XLM) $ 0.107266 3.86%
monero
Monero (XMR) $ 161.79 1.97%
blockstack
Stacks (STX) $ 1.91 0.91%
hedera-hashgraph
Hedera (HBAR) $ 0.076975 0.16%
maker
Maker (MKR) $ 2,954.07 0.04%
filecoin
Filecoin (FIL) $ 4.57 5.07%
render-token
Render (RNDR) $ 6.55 0.52%
okb
OKB (OKB) $ 42.84 3.16%
vechain
VeChain (VET) $ 0.031695 2.70%
cosmos
Cosmos Hub (ATOM) $ 6.52 2.84%
mantle
Mantle (MNT) $ 0.777751 1.67%
crypto-com-chain
Cronos (CRO) $ 0.094766 0.36%
arbitrum
Arbitrum (ARB) $ 0.759931 2.81%
injective-protocol
Injective (INJ) $ 24.15 6.79%
immutable-x
Immutable (IMX) $ 1.51 0.66%
sui
Sui (SUI) $ 0.874334 6.40%
dogwifcoin
dogwifhat (WIF) $ 2.20 11.52%
bittensor
Bittensor (TAO) $ 298.93 0.71%