Sucden Expects Gold to Drop to $3,900 Before the Fed, Then Recover to $4,300

Sucden Financial expects gold to test support near $3,900 per ounce before the Fed's December meeting, before recovering to the $4,200 to $4,300 range by mid-January.

The company said silver could fall to the $50 to $53 per ounce range before rebounding to $57 to $60, according to a report published by Kitco. It linked the forecasts to market pricing of roughly an 80% probability of a rate hike in December, and Brent crude remaining above $110 per barrel.

It noted that the People's Bank of China's purchases reached 23 tonnes in September, bringing its year-to-date purchases to 103 tonnes, extending a buying streak to 23 consecutive months. It added that gold ETF holdings reached a record high of 101.55 million ounces in mid-October.

The report suggests that continued Fed tightening could pressure the metal in the near term, but demand from central banks and funds limits downside risks. The market is awaiting the December meeting to determine the trajectory of interest rates and its implications for gold and silver prices.

What Do These Terms Mean?

Technical Support Level: A price point at which the metal attracts buyers who prevent further decline, causing the price to pause or rebound upward.

Exchange-Traded Fund (ETF): An investment fund traded on stock exchanges like regular stocks that tracks the price of a commodity or index instead of buying the physical asset itself.

Ounce: A unit of weight for precious metals equal to approximately 31.1 grams, used globally to price gold and silver.