00:00Amy Goward, Lead Medals Commodity Strategist at Morgan Stanley, writing,
00:03We don't think prices have peaked.
00:05With geopolitical risk, positive signals from central banks and ETF buying,
00:08we highlight our bull case, 5,700 for the second half.
00:12Amy joins us now for more.
00:13Amy, good morning.
00:14Just to clarify, is that the second half of this week or the second half of this year?
00:19It's the second half of this year.
00:21Amy, let's get into that call.
00:22We have moved so, so quickly on the precious metal.
00:25Have we got a new driver here, given developments over the last week?
00:28Yeah, look, I think there's multiple drivers working together.
00:33So, of course, we should mention geopolitical risk and all of the uncertainty that we have
00:37at the moment.
00:38I think that is driving investors towards precious metals in particular, and especially
00:42given prices that they're performing so well.
00:44I think that is providing additional price momentum.
00:47We also got a bit of dollar weakness the last few days, and that is always a tailwind for
00:52commodities, making them cheaper for non-dollar holders.
00:55And then I think while we're still in this, when will the Fed cut rather than if the Fed
00:59will cut, that's also a broader tailwind.
01:02But the key thing I think also has changed that's worth flagging is around central bank
01:06behavior.
01:07So, we've always thought of central banks thinking about gold as a percentage share of
01:11their reserves.
01:12And of course, that means as gold prices rise, you would think that they would slow the pace
01:16of buying because the price is kind of doing the work for them.
01:19But we had something really interesting from Central Bank of Poland about a week ago, saying
01:24they're now targeting 700 tons of gold to an absolute tonnage amount of gold, which would
01:30imply about 150 tons of buying.
01:32So, for context, Poland was the largest buyer already last year.
01:36This would be about another 50% buying on top.
01:38So, if central banks are just thinking about having gold regardless of the price, then that
01:44could also keep that kind of structural buying at a higher level than we were previously
01:47expecting.
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