[Click eStock] "Gold Price Ceiling at $3000 per Ounce"

Hana Securities forecasted on the 17th that as global economic uncertainty increases, the lower bound of gold prices, a safe-haven asset, will be supported.

Jeon Gyu-yeon, a researcher at Hana Securities, explained, "Since November last year, gold prices have fluctuated within a box range of $2,600 to $2,800 per ounce," adding, "This is due to the reduced gold demand from Chinese households as price burdens increased."

He continued, "As China's retail gold demand stagnates, gold prices become more closely correlated with the dollar, interest rates, and expected inflation," and added, "Recently, the rise in expected inflation in the U.S. has increased the incentive for inflation hedging."

He emphasized, "On the other hand, the Federal Reserve's (Fed) moderation in the pace of interest rate cuts and the rise in market interest rates have reduced gold's attractiveness," stating, "Real yields, measured by Treasury Inflation-Protected Securities (TIPS), have been rising since October last year, creating downward pressure from rising interest rates rather than inflation hedging demand."

Researcher Jeon predicted, "Further increases in gold prices will be possible only if the Fed's interest rate cut cycle becomes clear," and forecasted, "A favorable environment for gold prices will continue during the first half of this year." He explained, "The People's Bank of China resumed gold purchases after six months," and added, "Since the administration of U.S. President Donald Trump, global uncertainty has increased, making it highly likely that emerging markets will continue to purchase gold."

He further predicted, "Demand for safe-haven assets will support the lower bound of gold prices," and estimated, "The upper bound of gold prices this year is expected to be around $3,000 per ounce."

Regarding international oil prices, he projected a short-term rise followed by a gradual adjustment trend in the medium to long term. Researcher Jeon analyzed, "The Organization of the Petroleum Exporting Countries (OPEC) will begin gradual production increases starting April this year, so the international crude oil market will continue to experience an oversupply phase." He explained, "The International Energy Agency (IEA) lowered its estimate of the global oil supply surplus this year from 950,000 barrels per day to 725,000 barrels per day in its January monthly report," adding, "The supply still exceeds demand."

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