Economist Mohamed Salah explained that gold prices have been relatively stable recently, following a decrease in speculative trading and the influence of algorithms, which has largely returned the market to its normal trajectory.
In a Sunday interview with Al Arabiya Business, he explained that gold is now moving according to clearer fundamentals compared to previous years.
Salah indicated that if it maintains its position above US$4,650, then the price of gold is expected to continue its upward trend towards $4,900, with a positive outlook in the near term.
Global monetary policy trends, particularly decisions by the US Federal Reserve, play a pivotal role in determining gold’s direction, noting that markets are largely pricing in the likelihood of interest rates remaining unchanged in the current period.
Salah noted that Federal Reserve Chairman Jerome Powell’s tone during press conferences will be a crucial factor in gold’s movements, as any indications of monetary tightening or a delay in interest rate cuts could support a rise in the precious metal.
He emphasized that inflationary pressures in the US economy remain a major factor supporting gold, predicting that it will reach levels exceeding $5,000 before mid-year, given the continued uncertainty in global markets.
Salah predicted that central banks, particularly in emerging markets, would continue to increase their gold purchases to diversify reserves and reduce reliance on the dollar.
Gold has gained added importance as a financial instrument that can be used in swap transactions, in addition to its role as a store of value, he added.
Central banks, such as the People’s Bank of China and the Czech Republic, continue to buy gold, albeit at varying rates, which strengthens global demand and supports its upward trend in the coming period, Salah concluded.
Edited translation from Al-Masry Al-Youm
