The head of Target Investment Company, Noureddine Muhammad, said that gold prices started the year strongly as a result of the uncertainty in the markets and the weakness of US economic indicators, and the Federal Reserve raised interest rates, as they represented strong reasons that gave support to gold.
Noureddine Muhammad added, in an interview with Al-Arabiya, today, Sunday, that the first half of the current year witnessed strong demand from central banks for gold as a hedge.
He explained that the situation was different after that, and the currencies of some countries began to decline, and those countries resorted to strengthening their currencies, and a torrent of central banks selling gold began, led by the Turkish Central Bank, which sold 70 tons of gold in April and 81 tons in May, and therefore the gold supply increased in the market.
He pointed out that, on the other hand, the purchase of gold traded funds increased, but it did not support the yellow metal in light of the large sales from central banks in the period from May to June, and that was the main reason for the decline in the price of an ounce of gold.
The head of the Target Investment Company said that US stocks rose in the past period as a result of the increase in risk appetite, which reduces dependence on gold, which increases reliance on it in the event of fear and uncertainty in the market.
He added that despite the expectation that the “federal” interest rate hike will reach the top, it is expected to raise it again, which will affect gold prices in the coming period, but it will not reach low levels at 1600 and 1700 dollars per ounce, and prices may witness 1870 per ounce during the current quarter, according to To assess whether or not the Fed will continue to raise interest rates on gold prices.