Goldman Sachs has raised its gold price forecast to $2900 per ounce for early 2025 compared to $2700 per ounce earlier due to rising ETF inflows, interest rate cuts and central bank buying.
So far in 2024, the price of gold has risen around 28%, and has broken record after record amid US Federal Reserve's half-percentage-point interest rate cut, geopolitical uncertainty and continued purchases by world’s central banks. Gold’s safe-haven asset status means it retains its value better than interest-bearing assets during times of political and financial uncertainty.
"We reiterate our long gold recommendation due to the gradual boost from lower global interest rates, structurally higher central bank demand and gold's hedging benefits against geopolitical, financial, and recessionary risks," the bank said in a note as cited by Reuters.
Goldman Sachs raised their 2024 average gold price forecast to $2395 per ounce from $2357 per ounce earlier, and 2025 outlook to $2973 per ounce from $2686 per ounce.
"Our nowcast of central bank and other institutional demand in the London over-the-counter (OTC) market shows that purchases remained strong through July, averaging 730 tons annualized year-to-date, or about 15% of global annual production estimates, with a large contribution from China," Goldman Sachs said.
Theodor Lisovoy, Managing Editor, Rough&Polished
