Standard Chartered has adjusted its stance on gold, downgrading it from a top pick to a “core holding” as it anticipates a short-term consolidation in prices. Despite this year’s significant rally, the bank expects gold prices to experience a period of moderation over the next one to three months, potentially reaching $3,100 per ounce. This prediction is based on a pattern of behavior observed since 2022, where major buyers have consistently demonstrated price sensitivity, leading to intermittent periods of sideways movement in the market.
According to analysts, this near-term consolidation is a normal correction after a strong gain. However, Standard Chartered remains optimistic about gold’s long-term prospects, forecasting a potential price surge to $3,500 within the next 6 to 12 months. This bullish outlook is driven by the expectation of increased demand from central banks, which are likely to drive up prices.
The bank’s analysts pointed to the recurring pattern of price sensitivity among major buyers, which has resulted in periods of consolidation following significant gains. This pattern suggests that the current rally may be due for a pause, allowing prices to stabilize before potentially resuming their upward trajectory. Despite this short-term caution, Standard Chartered’s long-term projection of $3,500 per ounce reflects a strong conviction in gold’s potential for growth.
Overall, Standard Chartered’s adjusted stance on gold reflects a nuanced view of the market, balancing short-term caution with long-term optimism. While the bank expects a near-term consolidation, it remains confident in gold’s potential for significant gains over the next year, driven by reaccelerating central bank demand. As such, investors may want to consider gold as a core holding, with a view to potentially benefiting from its long-term growth prospects.