Major financial institutions expect the price of gold to continue rising in 2025 due to a combination of factors, including a resurgence in exchange-traded fund (ETF) inflows and plans to cut interest rates by major central banks around the world, including the United States. Federal Reserve System.
Citi highlighted in a recent note that gold is likely to maintain its strength, supported by the final stages of the US business cycle and expectations for further weakness in the labor market. The bank also notes that gold could benefit from a potential rebound in oil prices due to escalating tensions in the Middle East.
In a Sept. 30 note, Goldman Sachs (NYSE:) cited the gradual rise in low global interest rates, continued strong demand from central banks, and the role of precious metals as a hedge against a variety of risks. He reiterated his positive attitude toward gold. , geopolitics and recession concerns.
Goldman Sachs analysts suggest that about two-thirds of the expected rise in gold prices ($2,900 an ounce) in early 2025 could come from central bank purchases in the London over-the-counter market. I am doing it. The remaining third of the price increase is due to a gradual increase in ETF flows following the Fed’s interest rate cuts.
Gold’s performance this year has been impressive, rising nearly $652 an ounce, a 31.6% gain, and putting it on its biggest annual upward trajectory since 2007. On Monday, the precious metal hit a record high of $2,740.37 per ounce, posting several gains. Record highs throughout the year.
Analysts at JPMorgan say strong physical demand from China and central banks has supported gold prices over the past two years. But they stress that investor flows, particularly through retail exchange-traded funds (ETFs), will be critical to continued upside during the Fed’s next rate cut cycle.
The Fed began its easing cycle on Sept. 18 with a 0.5 percentage point cut, and plans to cut rates by an additional 50 basis points by the end of this year, followed by a full rate cut next year.
Analysts say the US presidential election on November 5 could also contribute to the rise in gold prices, as potential market volatility prompts investors to seek the safety of gold.
Brokers have given various predictions for gold prices in 2024 and 2025. Commerzbank has set a target of $2,600 an ounce by mid-2025, and ANZ sees a rise to $2,900 by the end of 2025, while Macquarie sees prices peaking in the first quarter of 2025. I’m predicting it. At $2,600 an ounce, it could rebound towards $3,000.
Goldman Sachs has a $2,900 target for early 2025, Bank of America (NYSE:) sees gold reaching $2,700 by mid-2025, and JPMorgan has a $2,850 target. This is the goal. Citi Research sees a zero-to-three month target of $2,800 an ounce and a six- to 12-month target of $3,000 an ounce.
Reuters contributed to this article.
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