Gold Price Forecast

Gold Prices Expected to Rise
Investing.com — The price of gold is projected to increase over the next 6 to 12 months due to declining interest rates and strong central bank purchases, according to analysts at UBS.

Gold prices reached a record high in Asian trading on Friday, continuing a multi-year upward trend fueled by safe haven demand.

• Current Prices
  • Spot gold rose 0.4% to a record high of $2,706 per troy ounce.
  • Gold futures expiring in December increased by 0.5% to $2,720.15 an ounce.

In a note to clients, UBS analysts stated that demand for gold is likely to remain strong as central banks and financial institutions are expected to add to gold reserves, albeit at a slower pace in the first half of 2024. This move is aimed at diversifying their holdings and mitigating various risks.

Analysts suggest that, combined with a potential shift by the Federal Reserve towards policy easing, gold prices could reach $2,900 per ounce by September 2025. Historically, there is an inverse relationship between interest rates and gold prices. A decline in rates typically leads to higher gold prices.

The Fed cut rates by an unexpected 50 basis points in September. Markets anticipate additional cuts at future Fed meetings, though recent data indicating stronger retail sales and fewer jobless claims raised concerns that cuts could happen more slowly than expected.

Despite these concerns, gold has found support from global counterparts such as the European Central Bank, which recently implemented its first back-to-back rate cuts in 13 years.

Furthermore, the analysts predict that a contested US presidential election, economic uncertainty, and geopolitical tensions are likely to further elevate gold prices in the upcoming weeks.