Amundi SA: Gold Prices to Rise to $4,500 Per Ounce

Europe's largest asset manager, Amundi SA, has predicted that the price of gold will rise to approximately $4,500 per ounce following a wave of selling that pushed the metal to a three-month low.

Lorenzo Portelli, Head of Cross-Asset Strategy at the Amundi Investment Institute, stated that the worst is over, noting that investor positions have lightened following last week's pullback and that a recovery could occur in the coming weeks. The sale of precious metals by investors to cover losses in other areas and the unwinding of artificial intelligence-focused trades had pushed gold below $4,000 per ounce last week. Gold, which has lost approximately 10 percent of its value since September, continues to hover near this threshold.

While higher-than-expected inflation data has strengthened expectations that the US Federal Reserve will raise interest rates, Portelli noted that the market is already pricing in an inflationary environment not accompanied by a recession. Stating that reaching the previously forecast year-end level of $5,000 no longer seems likely, Portelli added that their base scenario is to reach $4,500, an increase of at least 10 percent from current levels. While gold-backed exchange-traded fund (ETF) investors have sold approximately 17 tons in the last three sessions, central bank purchases and demand for hedging against macroeconomic uncertainty continue to support prices.