Gold Could Surge to $4,500 Per Ounce Within a Year, Says Julius Baer Strategist
Mark Matthews, strategist at Julius Baer, predicts gold prices could reach $4,500 per ounce within a year, driven by inflation hedging and geopolitical shifts. He notes gold's historical 5% annual rise against the USD over the past century. Matthews also highlights AI's impact on big tech, leading to improved ad revenue and reduced labor costs, with 153,000 recent job cuts in the tech sector. On foreign investment in India, he reports current holdings at 15% of free float, near historic lows, with recent selling to fund China investments. Matthews expects limited further selling and potential resumption of foreign buying if earnings improve.
*this image is generated using AI for illustrative purposes only.
Mark Matthews, a strategist at Julius Baer, has made a bold prediction about the future of gold prices. According to Matthews, the precious metal could reach $4,500 per ounce within a year, driven by its role as an inflation hedge and increased demand due to geopolitical shifts towards a multipolar world.
Historical Performance and Future Outlook
Matthews highlighted gold's historical performance, noting that it has risen by an average of 5% annually against the US dollar over the past century. This trend, combined with current global economic and political factors, forms the basis for his bullish outlook on gold.
AI's Impact on Big Tech and the Job Market
The strategist also commented on the significant impact of artificial intelligence (AI) on the market, particularly for big tech companies. He observed that these companies are effectively monetizing AI through:
- Improved ad revenue
- Reduced labor costs
Matthews pointed out that the recent wave of 153,000 job cuts in the tech sector was primarily driven by AI advancements. To put this in perspective, he noted that the 'Magnificent Seven' (Mag-7) companies collectively employ approximately half a million people.
Foreign Investment Trends in India
Regarding foreign investment in India, Matthews provided insights into recent trends:
| Metric | Value |
|---|---|
| Current foreign holdings (% of free float) | 15.00 |
| Status | Near historic lows |
| Recent trend | Selling to fund China investments |
Matthews expects limited further selling of Indian holdings by foreign investors. He anticipates that foreign buying could resume if there's an improvement in earnings.
Key Takeaways
- Gold price prediction: Potential rise to $4,500 per ounce within a year
- Factors driving gold demand: Inflation hedge and geopolitical shifts
- AI impact: Significant job cuts and improved efficiency in big tech
- India's foreign investment: Currently at low levels with potential for future buying
As global economic landscapes continue to evolve, investors and market watchers will be keen to see how these predictions and observations play out in the coming months.
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