Gold may attain $3,000 per ounce by mid-2025 and $2,600 by the top of 2024 pushed by US rate of interest cuts, sturdy demand from alternate traded funds and over-the-counter bodily demand, mentioned Aakash Doshi, head of commodities, North America at Citi Analysis.
Final week, the World Gold Council mentioned world bodily backed gold alternate traded funds noticed a fourth consecutive month of inflows in August.
With the subsequent Federal Reserve assembly approaching on September 18, markets are gripped by the chance of the primary US rate of interest minimize since 2020. Low charges are typically supportive for gold, which bears no curiosity.
Buyers are presently pricing in a 55% likelihood of a 25-basis-point US fee minimize and a forty five% likelihood of a 50-bps minimize, the CME FedWatch instrument confirmed.
If incoming knowledge factors to development dangers and weak point within the labor market, it is going to increase the prospect of a 50 bp fee minimize in both November or December, which might enhance the tailwind for gold and pull ahead the timing for attainment of $3,000, mentioned Peter A. Grant, vice chairman and senior metals strategist at Zaner Metals.
Rate of interest cuts from main central banks are nicely underway, with the European Central Financial institution on Thursday delivering its second quarter-point minimize of the yr.
“We’re additionally evaluating different components stirring up demand from the Western investor, together with the upcoming US election arguably including to the uncertainty and gold serving as a hedge towards fast occasion dangers,” mentioned Joseph Cavatoni, market strategist at World Gold Council.
The upcoming Nov. 5 presidential election may enhance gold costs as potential market volatility could drive buyers in direction of safe-haven gold.
Attaining the $3,000 per ounce goal is feasible, mentioned Daniel Pavilonis, senior market strategist at RJO Futures, including that the state of affairs could possibly be pushed by political unrest following elections.
Funding banks and analysts have turned more and more bullish on gold, with Wall Road financial institution Goldman Sachs exhibiting the best confidence in near-term upside in gold, which stays its most well-liked hedge towards geopolitical and monetary dangers.
Australia’s Macquarie raised its gold worth forecasts this week and is now searching for 1 / 4 common cyclical peak within the first quarter subsequent yr of $2,600 per ounce, with potential for a spike in direction of $3,000.
“Whereas the backdrop of challenged developed market fiscal outlooks stays structurally constructive for gold, so much is arguably already within the worth, with the potential for cyclical headwinds to emerge later subsequent yr,” analysts at Macquarie mentioned.
(By Anushree Mukherjee, Anjana Anil and Swati Verma; Enhancing by Christina Fincher)