Interest Rate Hike Cycle Casts Shadow Over Gold Prices
The Malaysia Gold Association (MGA) is concerned that the ongoing interest rate hike cycle in major economies will negatively impact gold prices. According to Datuk Seri Louis Ng, MGA's president, further interest rate increases could dampen the precious metal's price.
Ng explained that the upcycle in interest rates could continue with two or three more rate increases, pushing interest rates to 5% or 5.25%. Once interest rates settle down, a downcycle is expected, which would lead to higher gold prices. However, if interest rates rise again, it could suppress gold prices.
The MGA president noted that geopolitical tensions, particularly the ongoing conflicts in West Asia and Ukraine, have already been factored into current gold prices. As a result, Ng predicts that gold will trade between $4,000 and $5,000 per troy ounce for the next two years.