Rua Gold Inc. (TSXV: RUA, OTC: NZAUF, WKN: H8E)
An Emerging Gold Explorer with Two Highly Prospective Land Packages in New Zealand’s historical gold fields.
Gold prices are consolidating nowadays, coupled with the suspension of China’s central bank from increasing its gold holdings for the second month in a row, has left some investors concerned about the precious metal’s next move.
However, solid gold demand in the second half of the year could push gold prices up to $2,600 an ounce, commodities analysts at Citi said in a report released on Wednesday (10 July).
According to the analysts, central bank gold demand is expected to hit another record high this year as investor interest recovers. According to Citi’s model, analysts expect central banks to buy about 1,100 tonnes of gold this year, up 5.8% year-on-year.
Analysts note that official sector gold demand has stabilised at 28-30% of record gold mine production since 2022. Due to concerns over trade wars and US fiscal policy, analysts believe central bank demand could increase to 35 per cent next year.
In addition to bullish gold demand from central banks, Citi also expects further growth in demand from retail consumers and investors.
“Investment demand from both the public and private sectors can be seen as the most important factor driving gold prices higher,” Citi analysts wrote in the report. “This could explain why gold prices remain high in a world of high interest rates. We remain constructive on physical demand for gold over the next 12 months, with looming Fed rate cuts and headwinds in the US labour market set to support physical demand for gold.”
In this environment, Citi sees the price of gold fluctuating between $2,800 and $3,000 per ounce by mid-2025.
Earlier this month, the World Gold Council released its 2024 Central Bank Gold Reserves Survey, which showed that of the 70 central bank responses received for the survey, 29 per cent of respondents said they intended to increase their gold reserves over the next 12 months.
