The balance of gold is changing: Here is the year-end target that the market is waiting for!

Milliyet.com.tr/ÖZEL Following the ceasefire between Israel and Iran and the decrease in tension in the Middle East, the gram gold price, which had fallen to 4,200 TL in recent weeks, has seen a rise again in the new week. Exceeding 4,300 TL during the week , gram gold continues to seek direction at this critical threshold.

NEW CUSTOMS TAX MOVE FROM TRUMP

US President Donald Trump said that Washington will begin sending letters to 10-12 countries stating the customs duty rates they will face on imports to the US. Stating that the tariffs could range from 10-20 percent to 60-70 percent, Trump said that countries will begin paying these tariffs on August 1. Trump's statements in particular brought about an increase.

Especially in the recent process, expectations for interest rate cuts from the US Federal Reserve (Fed) and the Central Bank of the Republic of Turkey (CBRT) have increased. Will there be a rally in gold with possible interest rate cuts? What will be the direction of gold?

'THE MOST IMPORTANT FACTOR SUPPORTING THE RISE IN GOLD'

Belgin Maviş, Founding Partner of BLG Financial Consulting, who explained the year-end target for gram gold to milliyet.com.tr, made the following statements: “Donald Trump’s taxes will have an impact on gold. With the tariffs starting to be implemented, the negative effects on pricing and the possibility of increasing inflation are also on the Fed’s radar.

The implementation of tariffs, the rise in inflation, and the possibility that the Fed may postpone the rate cut from September to December appear to be the most important factors supporting the rise in gold prices at the moment.

HOW LONG WILL THE RISE IN GOLD LAST?

Even though there may be corrections in gold from time to time, in periods of high inflation, central banks withdraw excess money from circulation as interest rates increase. In order to balance inflation, central banks increase their reserves of bonds and gold. Gold will maintain its high course until mid-2025 and 2026, that is, until inflation shows a permanent downward trend and interest rates enter a downward trend.

'EVERY DECLINE WILL BRING WITH IT A NEW BUYING OPPORTUNITY'

In addition, there is a possibility of war in the world, a nuclear war, an increase in economic wars, and a temporary ceasefire between Israel-Palestine and Iran. Any violations in this regard or developments between Russia and Ukraine will always be on the radar of the markets. Therefore, gold continues to maintain its important place both in the stock of central banks and in the investor's portfolio. Every decline will bring new buying opportunities.

YEAR-END TARGET FOR GRAM GOLD

My expectation for gram gold by the end of 2025 is that it will test the 4,500 TL level. The upward trend on the gram gold side will continue gradually. This will take us to the 4,500 TL and 4,800 TL band. In case of extraordinary circumstances, the 4,500 TL target can be revised to 5,000 TL. There is not much justification for this at the moment.

WILL THERE BE A RALLY IN GOLD AFTER THE FED AND CBRT INTEREST RATE DECISIONS?

We have also seen some pretty rude statements from Trump to Fed Chair Powell, asking the Fed to cut interest rates. Despite everything, despite Trump, I do not expect the Fed to cut interest rates at the Fed meeting at the end of July.

As for us, after the latest inflation figures, I expect a 350 basis point interest rate cut at the Central Bank meeting on July 24. The reduction of the policy rate from 46% to 42.5% will be motivating to stimulate the real sector by creating relief in loans. I think the CBRT will want to ease the market with a front-loaded interest rate cut.

I expect a rate cut from the TCMB before the Fed meeting. Moody's has an assessment of Türkiye on July 25. If it does not pass, I think there may be a rating increase from Moody's.

Will all these developments cause a rally in gold? Gold has already been rallying for the last year. I do not expect an additional rally. However, if a major deterioration, fear, threat, unexpected situations occur, it may happen. However, we can say that gold is already continuing its rally.”