The price of gold has ignored all growth drivers in recent days. Even Fitch's downgrade of the U.S. credit rating did not help to provide a growth momentum. According to Goldman Sachs analysts, the downgrade was not a surprise.
Gold demand is decreasing, reducing the possibility of growth in prices of the metal. Investors' interest is fading, despite the ongoing uncertainty in the global economy.
Global precious metal demand, excluding OTC trade, decreased by 2% year-on-year in the second quarter of 2023. The decline was driven by a slowdown in purchases by central banks and lower consumption by the technology sector. This was reported by the World Gold Council (WGC) on Tuesday.
At the same time, SPDR Gold Trust, the world's largest gold-backed fund, said its assets fell 0.4% on Tuesday.
Analysts have come to expect a smaller gain in gold prices this year, which is also a bearish factor.
According to Reuters July data, analysts have lowered their year-end forecasts for gold. The metal will need strong growth drivers to reach new all-time highs.
36 experts took part in the survey to compile a consensus forecast. Analysts believe that in the third quarter the average price of gold will be $1,950 per ounce. In the last three months of the year they will reach $1,995. The average gold price for 2023 will be around $1,945 and almost $1,990 for next year. Last quarter's Reuters poll estimated the gold price for the current year at around $1,950.
According to technical analysis, the gold price is in a downtrend. At the same time, the potential for a decline has not yet been realized. The $1,938 mark, where the Fibonacci level of 0.236 is placed, will be the downside target. The lower border of the rectangle also serves as the support. A stop-loss could be placed when the price rises above 1,960 dollars. If this happens next week, the downtrend will be broken.
A decline in the gold price:
Take profit – 1 938
Stop-loss – 1 960