Major Banks Forecast Continued Gold Rally into 2025
(Reuters) – Major banks anticipate that gold will continue its record-breaking price rally into 2025, driven by a resurgence in large inflows to exchange-traded funds (ETFs) and expectations for additional interest rate cuts by prominent central banks, including the U.S. Federal Reserve.
Citi notes, "Gold is expected to remain strong, as the US economy is clearly late cycle – with further labor market deterioration anticipated… and numerous central banks remain keen buyers. Gold should also benefit if oil spikes due to near-term Middle East escalation."
Goldman Sachs reiterates a long gold recommendation, citing a gradual boost from lower global interest rates, high central bank demand, and gold's hedging benefits against geopolitical, financial, and recessionary risks.
Analysts at Goldman Sachs predict that moderating but significant purchases by central banks on the London OTC market could contribute to about two-thirds of the expected rise in gold prices to $2,900 per ounce by early 2025. The remaining price upside is anticipated to come from rising ETF flows following Fed rate cuts.
Gold has already surged by nearly $652 an ounce, or 31.6%, this year, marking its largest annual increase since 2007. The precious metal has reached record highs several times in 2024, including a peak of $2,740.37/oz on Monday.
J.P. Morgan highlights that strong physical demand from China and central banks has supported gold prices over the past two years, but continued investor flow, particularly in retail-focused ETFs, is crucial for a sustained rally during the Fed's cutting cycle.
The Fed initiated its easing cycle on Sep. 18, with forecasts for additional rate cuts before the end of the year and into next year. Gold is typically favored as an investment in low-interest rate environments and periods of geopolitical unrest.
The upcoming U.S. presidential election on Nov. 5 could further boost gold prices by increasing market volatility, leading investors to seek the safety of gold.
Latest Brokerage Forecasts for Gold Prices (in $ per ounce)
| Brokerage/Agen | Annual Price Forecasts | 2024 | 2025 |
|---|---|---|---|
| Commerzbank | For mid-2025 | $2,600 | $2,600 |
| ANZ | By end-2025 | $2,394 | $2,805 |
| Macquarie | Q1, 2025 peak | $2,339 | $2,463 |
| Goldman Sachs | Early-2025 | $2,395 | $2,973 |
| UBS | Mid-2025 | – | $2,700 |
| BofA | Could hit $3,000/oz | $2,365 | $2,750 |
| J.P. Morgan | $2,398 | $2,775 | |
| Citi Research | 0-3 month forecast | $2,400 | $2,900 |
End-of-period forecasts
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