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Fed policy outweighs geopolitical risks, China purchases as gold forecasts retreat: survey

Bullion forecasts have softened, LBMA’s survey shows, despite the World Gold Council reporting unprecedented demand in second quarter

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The outlook for gold marks a significant retreat from the bullishness seen at the start of the year. Photo: dpa
Julie Zhang
The US Federal Reserve’s rate policies under Kevin Warsh have outweighed geopolitical tensions and Beijing’s dedicated gold purchases to become the decisive factor influencing price forecasts for the precious metal, according to a survey.

Analysts cut their price projections for 2026 compared with six months ago, said the London Bullion Market Association (LBMA), the world’s authority for precious metals, in its mid-year survey released on Tuesday. Gold prices hit a record high of over US$5,600 per ounce in January.

Even so, gold prices could climb as much as 18 per cent from recent trading levels by the end of the year, the survey found.

The July poll of 16 analysts put the highest year-end forecast at US$5,100 per ounce.

The average year-end forecast stood at US$4,500. Ten analysts cited the Fed’s response to US inflation data as their major concern, while five pointed to the US-Israel war on Iran and broader Middle East instability.

One analyst highlighted central banks’ appetite for gold as the key driver.

The outlook marks a significant retreat from the bullishness seen at the start of the year, when the LBMA’s January survey included forecasts of gold breaking above US$7,000, supported by expectations of conflict in Iran and central bank buying.
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