World Gold Council Sees Gold as Underowned, Forecasts Continued Rally
Thu April 18 2024
The World Gold Council, an authority in global gold markets, expects the recent gold price rally to continue, supported by geopolitical risks, steady central bank purchases, and demand for coin and jewelry. The council also sees gold ETFs fueling a future rise in prices given their precious metal’s low ownership levels.
World Gold Council Paints Bullish Panorama for Gold
Gold’s bull rally might be set to continue, even after having reached all-time high prices. A gold market commentary report issued by the World Gold Council (WGC), a global authority in gold markets, forecasts a positive rally for gold, supported by different factors in favor of its appreciation.
The council explained that the rise of more than 8% during March was fueled by “growing geopolitical risk, steady central bank buying, and resilient demand for jewelry and bars and coins.” In addition, the report mentions the development of a stagflation element in the U.S. economy, a factor traditionally favoring gold prices.
Gold exchange-traded funds (ETFs) have been disconnected from the global rally, as these are currently at one of their lowest share of the whole U.S. ETF market. The report explains that “the last time positioning reached these levels gold embarked on a substantial move higher.”
The WGC stressed:
Despite its high price, we currently view gold to be underowned, and unlike previous rallies this time it does not look as “toppy.”
The council also disregarded the notion indicating that gold ETF investors were moving to Bitcoin ETFs. According to survey work, gold ETF outflows and bitcoin ETF inflows were more speculative than structural, with the former starting long before the launch of the first bitcoin ETFs in the U.S. markets.
In conclusion, the market setup and the elements surrounding it paint a pretty picture for gold prices moving forward. The WGC believes that these fundamentals and the low participation from U.S. investors might keep the rally going even after having reached historic numbers.
Source: https://news.bitcoin.com/