Natixis precious metals analyst Bernard Dahdah maintains his year-end gold price forecast of $4,600 an ounce despite the metal's sharp retreat from record highs above $5,500 to around $4,100. In an interview with Kitco News, Dahdah attributed his unchanged outlook to expectations that central banks will resume large-scale gold purchases after months of disruptions caused by the Iran-US conflict forced reserve sales to support domestic currencies during an energy crisis. The analyst stated he deliberately resisted adjusting his forecast during gold's rally to $5,500, arguing that chasing market swings would constitute poor analysis, and now expects the next bull market leg to be driven by official-sector demand rather than speculative investment.
Analyst Maintains Year-End Target Despite Volatility
Dahdah told Kitco News his forecast for the end of the year remains $4,600 an ounce. "When we were at $5,500, people were asking why I hadn't raised my forecast. It would make me a pretty poor analyst if I just changed my view every time the wind changed," he stated. Gold currently trades around $4,100 an ounce after correcting from record highs above $5,500.
Central Banks Expected to Resume Record Buying
The Natixis analyst expects the next phase of gold's bull market to be driven by renewed official-sector buying as central banks rebuild reserves following disruptions from the Iran-US conflict. Dahdah noted many central banks were forced to sell or monetize portions of their gold reserves during the energy crisis to support domestic currencies as oil prices surged. "Now that this war is behind us---in principle---I think central banks will have record months of gold purchases," he stated. However, Dahdah stopped short of forecasting a record year for official-sector buying because of weak demand during the first quarter, though he said monthly purchases could surprise to the upside in the second half as reserve managers refocus on diversification.
Geopolitical Shift Undermining Dollar Confidence
Dahdah argued that the geopolitical landscape has permanently altered how reserve managers view U.S. assets. "I wouldn't be surprised to see record months because the U.S. has lost its image as a guarantor of international stability," he stated. The analyst said the shift relates less to America's military strength and more to confidence in its role as the stabilizing force behind the global financial system. "The image has changed," Dahdah added, noting that countries holding large U.S. dollar reserves may increasingly question whether those assets provide the same level of security they once did.
Gold Swaps Demonstrate Reserve Flexibility
The recent crisis demonstrated that gold reserves function as more than passive stores of wealth, according to Dahdah. Rather than permanently liquidating bullion, some central banks were able to monetize their holdings through swap arrangements, allowing them to access liquidity while retaining long-term ownership of their gold. "It's not just an asset that you have to give away in a fire sale. A swap is a reasonable way to monetize your gold if you're a responsible country," Dahdah stated.
Chinese Demand to Support Price Floors
Dahdah expects Chinese demand to remain an important pillar supporting prices. While he does not anticipate a dramatic surge in consumption, he believes steady buying from China combined with renewed official-sector demand will continue to establish progressively higher price floors. "I think with the way central banks are consistently adding gold, it's just putting a floor under the market," he stated. "It's the marginal incremental increase that creates those higher floors."
FAQ
What is Natixis's year-end gold price forecast?
Natixis precious metals analyst Bernard Dahdah maintains a year-end gold price forecast of $4,600 an ounce despite the metal's retreat from record highs above $5,500 to around $4,100.
Why does Natixis expect central banks to increase gold buying?
Dahdah expects central banks to resume large-scale gold purchases after months of disruptions caused by the Iran-US conflict forced many institutions to sell or monetize portions of their reserves to support domestic currencies during an energy crisis. With the conflict moving into a less acute phase and energy markets stabilizing, he anticipates those institutions will return to the market.
How did the Iran-US conflict affect central bank gold reserves?
According to Dahdah, many central banks were forced to either sell or monetize portions of their gold reserves during the energy crisis to support domestic currencies as oil prices surged. Some institutions used swap arrangements to access liquidity while retaining long-term ownership of their gold.
