The worst is over for gold, according to Amundi

Europe's largest asset manager, Amundi SA, predicts that the gold price will rise to approximately $4,500 per ounce, following the selling wave that pushed gold to its lowest level in three months.

Lorenzo Portelli, Head of Cross-Asset Strategy at Amundi Investment Institute, stated that the worst is over. Portelli added that investors' positions have eased after last week's withdrawal, which is in favor of a recovery in the coming weeks.

Gold fell below $4,000 per ounce last week, hitting its lowest level since mid-July, as investors sold precious metals to cover losses elsewhere and the general unraveling of AI-driven transactions. Gold, which has lost approximately 10 percent of its value since September, continues to remain close to the said threshold. Higher-than-expected inflation data strengthened expectations that the US Federal Reserve would increase interest rates by the end of the year.

Portelli stated that the market has already priced in the worst-case scenario for gold, that is, an inflation environment without a recession. Such a scenario would require the Fed to raise interest rates aggressively; This creates a negative factor for gold, which has no return. Portelli stated that the current economic outlook does not require more interest rate increases than markets are currently pricing in.

Portelli stated that it no longer seems likely that gold will reach the previously predicted level of 5 thousand dollars per ounce by the end of the year. He added that Amundi's base scenario is to reach approximately $4,500 with an increase of at least 10 percent from the current level.

As a development that puts pressure on gold prices, gold-backed exchange-traded fund (ETF) investors, who have focused heavily on gold in recent weeks, sold approximately 17 tons of their holdings in the last three sessions. Portelli stated that longer-term factors, such as demand for protection against macroeconomic uncertainties, continue to support gold prices. He stated that the purchases made by central banks are likely to continue to support gold prices.

Portelli commented, "Be patient. The general picture is not pessimistic. It is a good time to enter the market as long-term investors."