Most Banks Anticipate Gold’s Bull Run Will Continue Through 2025, According to Reuters

Major banks anticipate that gold will continue its record-breaking price surge into 2025, fueled by a resurgence in large inflows to exchange-traded funds (ETFs) and expectations of further interest rate cuts from significant central banks globally, including the U.S. Federal Reserve.

Goldman Sachs reiterated its long-term bullish outlook on gold, citing factors such as the gradual impact of declining global interest rates, consistently strong demand from central banks, and gold’s role as a hedge against geopolitical, financial, and recessionary risks.

The ongoing, albeit moderating, purchases from central banks in the London OTC market could account for approximately two-thirds of the expected increase in gold prices, which are projected to reach $2,900 per ounce by early 2025. The remaining one-third of the potential price rise is anticipated to result from increased ETF inflows following the Fed’s rate cuts, according to analysts at Goldman Sachs.

Gold, which does not yield any interest, has gained nearly $577 per ounce this year, translating to over a 28% increase, positioning it for its most significant annual rise since 2010. The precious metal reached a peak of $2,685.42 per ounce last week and has achieved several record highs throughout the year.

Analysts at J.P. Morgan noted that robust physical demand from China and ongoing central bank purchases have bolstered gold prices over the past two years. However, they emphasized that investor flows, particularly from retail-focused ETFs, will be crucial for sustaining a rally during the forthcoming Fed cutting cycle.

The Federal Reserve commenced its easing cycle recently with a half-percentage-point rate cut, projecting an additional 50 basis points of cuts by year-end and a total reduction of one percentage point next year.

Gold, which offers no yield, tends to attract investors in low interest rate environments and during times of geopolitical instability.

The approaching U.S. presidential election on November 5 could further amplify gold prices, as potential market volatility might drive more investors toward the safe-haven asset.

Below are the latest brokerage forecasts for gold prices in 2024 and 2025 (in dollars per ounce):

• Commerzbank: 2024 – $2,600; 2025 – $2,600 (mid-2025)
• ANZ: 2024 – $2,394; 2025 – $2,805 (end-2025 – $2,900)
• Macquarie: 2024 – $2,339; 2025 – $2,463 (Q1 2025 peak – $2,600, with potential for a spike towards $3,000)
• Goldman Sachs: 2024 – $2,973; 2025 – $2,900 (early-2025 – $2,395)
• UBS: 2025 – $2,700 (mid-2025)
• BofA: 2024 – $2,365; 2025 – $2,750 (possibility of hitting $3,000)
• J.P. Morgan: 2024 – $2,398; 2025 – $2,775 ($2,850)
• Citi Research: 2024 – $2,360; 2025 – $2,875 (baseline average price projections of $2,800 – $3,000)

(End-of-period forecasts)

(Note: This story has been revised to correct the date in the dateline.)