CIBC boosts gold price forecasts. Says Trump Presidency would be more-bullish for bullion

July 10, 2024 at 02:18PM
In a report released late yesterday, CIBC significantly raised its gold price forecasts, seeing a more bullish outlook for bullion, especially in the event of a Trump presidency.

Key Takeaways:

Gold:

2024: New forecast is $2,290/oz, up from the previous $2,100/oz.

2025: New forecast is $2,600/oz, up from the previous $2,000/oz.

2026: New forecast is $2,400/oz, up from the previous $1,900/oz.

2027: New forecast is $2,200/oz, up from the previous $1,875/oz.

Long-term (2028 and beyond): New forecast is $1,975/oz, up from the previous $1,875/oz.

Silver:

2024: New forecast is $28.75/oz, up from the previous $24.97/oz.

2025: New forecast is $34.50/oz, up from the previous $24.00/oz.

2026: New forecast is $32.50/oz, up from the previous $23.50/oz.

2027: New forecast is $30.50/oz, up from the previous $23.00/oz.

Long-term (2028 and beyond): New forecast is $26.00/oz, up from the previous $23.00/oz.

Market Drivers:

The main driver for the change is central bank demand. “We
do not see central bank demand materially dissipating any time soon.”

“Demand for gold remains strong, with central banks continuing to purchase
gold driven by a longstanding strategy of USD diversification and, in some
cases, efforts to sanction-proof FX reserves.”

Retail demand, especially in Eastern economies, remains robust as investors seek wealth preservation amidst soft stock and real estate markets.

Central banks such as China, Russia and India possess gold holdings at 1-3% of
foreign exchange reserves, well below European central banks at over 10%, a level PBoC
has in the past repeatedly noted it sees as more ideal. Gold slumped this week on data showing the PBoC wasn’t buying but they expect that to reverse

ETFs have been a weak link but despite recent outflows, they are expected to reverse course with Fed cuts

US politics:

A Trump presidency would be particularly bullish for gold due to policies favoring higher deficits, tariffs, and potential pressure on Federal Reserve independence. Simply extending the maturing tax
cuts would add US$3 trillion to the deficit over the next ten years.

While a second term for Biden is also seen as positive for gold, Trump’s approach could create a more inflationary environment, further boosting bullion prices.

Silver Market Outlook:

Industrial demand for silver, particularly in solar and electrification sectors, is expected to rise, adding to a supply deficit.

The gold-to-silver ratio is projected to contract, benefiting silver prices.

Quotable:

If we marry the different starting positions (fiscal, monetary and valuation) with the policies
articulated by Trump (bigger deficits, higher tariffs, less Fed independence), it is easy to see
a better environment for gold prices if Trump repeats in 2024 – albeit Biden does not seem
much more restrictive on deficits and tariffs. Given neither candidate seems concerned on
fiscal positions coupled with a Federal Reserve (and to some extent all central banks)
seemingly more comfortable with higher structural inflation, we believe a Biden second term
shouldn’t be a negative for gold prices; but if Trump is re-elected (and follows through on his
policy positions), the already impressive rally in gold prices likely continues into 2025.

Note that gold didn’t do well in the first Trump Presidency but CIBC notes that the fiscal situation is vastly different now with a deficit almost four times as large as it was in 2016 and interest payments eating up 15% of revenues compared to 6% in 2016 (and on the way to 22% in 2033).

This article was written by Adam Button at www.forexlive.com.

HUBFX

For News Subscribe Us!

If you wish to receive the weekly market report, please subscribe. For a daily report please go to contact form to speak to the sales team.

You have been successfully Subscribed! Ops! Something went wrong, please try again.
PikPng.com_apple-icon-png_BBB

register your interest now

ALL RIGHTS RESERVED © 2024 HUBFX
Business Office at 7 Bell Yard, London, WC2A 2JR, United Kingdom

HUBFX Asia  Business Office at
100 Peck Seah St, 079333, Singapore

ALL RIGHTS RESERVED © 2024 HUBFX
Business Office at 7 Bell Yard, London, WC2A 2JR, United Kingdom

HUBFX Asia  Business Office at
100 Peck Seah St, 079333, Singapore

UKDEA24-Finalist-Badge2
GBT24_Finalist_Full-White

For clients based in the European Economic Area, payment services for HUBFX are provided by CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 – 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (Relation Number: R142701).  For clients based in the United States, payment services for HUBFX are provided by The Currency Cloud Inc. which operates in partnership with Community Federal Savings Bank (CFSB) to facilitate payments in all 50 states in the US. CFSB is registered with the Federal Deposit Insurance Corporation (FDIC Certificate# 57129). The Currency Cloud Inc is registered with FinCEN and authorised in 39 states to transmit money (MSB Registration Number: 31000206794359). Registered Office: 104 5th Avenue, 20th Floor, New York , NY 10011. For clients based in the United Kingdom and rest of the world, payment services for HUBFX are provided by The Currency Cloud Limited. Registered in England and Wales No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199).

Payment services for HUBFX UK and US are provided by The Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199) and The Currency Cloud Inc. which operates in partnership with Community Federal Savings Bank (CFSB) to facilitate payments in all 50 states in the US. CFSB is registered with the Federal Deposit Insurance Corporation (FDIC Certificate# 57129). The Currency Cloud Inc is registered with FinCEN and authorized in 39 states to transmit money (MSB Registration Number: 31000160311064). Registered Office: 104 5th Avenue, 20th Floor, New York , NY 10011 

 

Payment services for HUBFX are provided by The Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199) and The Currency Cloud Inc. which operates in partnership with Community Federal Savings Bank (CFSB) to facilitate payments in all 50 states in the US. CFSB is registered with the Federal Deposit Insurance Corporation (FDIC Certificate# 57129). The Currency Cloud Inc is registered with FinCEN and authorized in 39 states to transmit money (MSB Registration Number: 31000160311064). Registered Office: 104 5th Avenue, 20th Floor, New York , NY 10011 and CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 – 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of a electronic-money institution (Relation Number: R142701)

Rates are indicative only. Please log in for getting your rates.