Gold Price Rally Expected to Continue into 2025, Major Banks Predict
Major banks are anticipating gold to continue its record-breaking price rally into 2025, driven by a resurgence in large inflows to exchange-traded funds (ETFs) and the possibility of additional interest rate cuts from central banks worldwide, including the U.S. Federal Reserve.
Goldman Sachs reaffirmed their long gold recommendation, citing lower global interest rates, increased central bank demand, and gold's hedging benefits against various risks. They project a rise in gold price to $2,900 per ounce in early 2025, with central bank purchases and ETF flows playing significant roles in driving this increase.
Gold, a non-yielding asset, has already surged over 28% this year, reaching nearly $577 an ounce. Analysts believe that strong physical demand from China, central banks, and ETF investors will be crucial for sustaining a further rally amid the Fed's expected rate cuts.
The upcoming U.S. presidential election on Nov. 5 could also contribute to higher gold prices, as market volatility may lead investors towards safe-haven assets like gold.
Here are some brokerage forecasts for gold prices in 2024 and 2025:
- Commerzbank: $2,600 for mid-2025
- ANZ: $2,900 by end-2025
- Macquarie: Q1, 2025 peak of $2,600/oz, with potential for a spike towards $3,000/oz
- Goldman Sachs: $2,900 by early-2025
- UBS: $2,700 by mid-2025
- BofA: Scope for gold to hit $3,000/oz
- J.P. Morgan: $2,850
- Citi Research: Baseline average price projections of $2,800-3,000/oz in 2025
In summary, the outlook for gold remains positive as major banks foresee a continued rally in prices due to various factors such as central bank demand, ETF flows, and geopolitical uncertainties. Investors may consider adding gold to their portfolios as a hedge against risks and potential market volatility.