Gold Price Rally Expected to Continue into 2025, Major Banks Predict | Record Highs Anticipated Due to Central Bank Demand and Fed Rate Cuts
Major banks are forecasting that the record-breaking rally in gold prices will extend into 2025, driven by a resurgence in inflows to exchange-traded funds (ETFs) and expectations of further interest rate cuts from central banks worldwide, including the U.S. Federal Reserve. Goldman Sachs has reiterated its long gold recommendation, citing lower global interest rates, increased central bank demand, and gold's hedging benefits against various risks.
Analysts predict that central bank purchases and ETF flows will contribute to a surge in gold prices, with a projected rise to $2,900 per ounce by early 2025. Gold, a non-yielding asset, has already increased by over 28% this year, positioning itself as one of the top-performing assets of 2024. Factors such as physical demand from China and central banks, as well as investor flows, are expected to drive a sustained rally during the upcoming Fed rate cuts.
The Federal Reserve initiated an easing cycle in September and is anticipated to implement further rate cuts, making zero-yielding gold an attractive investment in a low-interest rate environment. Additionally, market volatility surrounding the U.S. presidential election in November could further boost gold prices as investors seek safe-haven assets.
Various brokerage forecasts for gold prices in 2024 and 2025 indicate a positive outlook, with price targets ranging from $2,339 to $2,973 by early 2025. Analysts are optimistic about the potential for gold to reach new highs, with projections of $2,800 to $3,000 per ounce in 2025.
In summary, the expected continuation of the gold price rally into 2025 presents an opportunity for investors to capitalize on the precious metal's potential for further growth amidst a backdrop of low interest rates and geopolitical uncertainty. By diversifying their portfolios to include gold, investors can potentially benefit from its role as a safe-haven asset and a hedge against various risks in the financial markets.
