Gold, Silver, Copper Forecast: 6% Copper, 3% Gold Rise on Fed Cuts – Goldman

By:

Arslan Ali

Published: Feb 21, 2024, 06:57 GMT+00:00

Key Points:

Goldman Sachs predicts a 6% rise in copper and 3% in gold prices following Fed rate cuts.
Rate cuts expected to outpace oil's gains, with no significant impact on natural gas or agriculture.
Lower borrowing costs and improved financial conditions could elevate commodity prices, despite possible June rate cut delays.

In this article:

Gold

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Rate Cuts to Propel Copper and Gold Prices, Outpacing Other Commodities

Goldman Sachs analysts anticipate that potential U.S. Federal Reserve interest rate reductions could significantly benefit copper and gold prices, predicting a 6% increase for copper and a 3% increase for gold.

This outlook is based on the expectation of a 100 basis point decrease in U.S. 2-year rates, with copper and gold poised to outperform other commodities like oil in immediate price gains.

Despite these forecasts, Goldman Sachs does not foresee substantial rate cut impacts on natural gas or agricultural commodities, attributing limited effects to micro factors such as inventory cycles and weather conditions.

Lower borrowing costs and better financial conditions may boost commodity prices, despite potential delays in June’s expected rate cut.

Gold Prices Forecast

Gold – Chart

On February 21, gold‘s price increased by 0.28%, trading at $2030.93. This movement positions the asset above its pivot point of $2024.00, suggesting a bullish outlook. Resistance levels are identified at $2038.75, $2048.04, and $2059.16, while support levels are at $2010.78, $2000.45, and $1988.68.

The 50-day Exponential Moving Average (EMA) at $2017.69 and the 200-day EMA at $2023.88, coupled with a bullish engulfing pattern and a crossover of the EMAs, indicate a strong buying trend.

The technical analysis points to a bullish trend for Gold, reinforced by the asset’s performance above the pivot point and the technical indicators suggesting continued upward momentum.

Silver Prices Forecast

Silver – Chart

During the Asian session, silver experienced a gain, closing at $23.15 with an uptick of 0.56%. This places the metal slightly above its pivot point of $23.14, indicating a bullish inclination.

Resistance is encountered at $23.51, $23.68, and $23.85, while support levels are positioned at $22.91, $22.72, and $22.53. The 50-day and 200-day Exponential Moving Averages (EMAs), at $22.84 and $22.89 respectively, have crossed over in a manner that, coupled with a bullish engulfing pattern, signals a robust buying trend.

Given these indicators, Silver’s trajectory is bullish as long as it stays above the pivot point, reflecting a positive momentum for the metal.

Copper Prices Forecast

Copper Chart

Copper‘s price edged up by 0.21%, trading at $3.87. The metal has surpassed its pivot point of $3.85, hinting at a bullish stance. Resistance levels are marked at $3.90, $3.93, and $3.96, with support thresholds at $3.81, $3.77, and $3.73.

Technical indicators reveal the 50-day Exponential Moving Average (EMA) at $3.80 and the 200-day EMA at $3.81, both underscoring the metal’s current strength. A breakout above the downward trendline at $3.84 suggests potential for a continued buying trend.

Therefore, Copper’s market outlook is bullish above $3.84, reflecting optimism for its near-term price trajectory.

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About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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