Gold market bulls are eyeing a record-breaking milestone of $3,000 per ounce as the price of bullion surges to new heights. The surge is fueled by monetary easing measures by major central banks and the intense US presidential election race. Spot gold hit a historic high of $2,572.81 an ounce, driven by safe-haven demand amid geopolitical and economic uncertainties, and robust central bank purchases.
Experts predict that gold could reach $3,000 per ounce by mid-2025 and $2,600 by the end of 2024, supported by US interest rate cuts, strong demand from exchange-traded funds, and physical demand. Global gold exchange-traded funds witnessed four consecutive months of inflows in August, according to the World Gold Council.
With the upcoming Federal Reserve meeting, expectations of the first US interest rate cut since 2020 are looming. Lower interest rates typically favor gold as it does not yield interest. Investors are currently factoring in the likelihood of a 25 or 50-basis-point cut, which would provide further momentum for gold, according to market analysts.
Major central banks are already implementing interest rate cuts, with the European Central Bank recently announcing its second quarter-point cut of the year. The uncertain global economic outlook, coupled with potential event risks like the US election, is driving Western investors towards gold as a hedge.
Analysts and investment banks are increasingly bullish on gold, with Goldman Sachs showing high confidence in its near-term upside potential. Macquarie, for instance, raised its gold price forecasts and anticipates a peak of $2,600 per ounce in the first quarter of the next year, with a possible spike towards $3,000.
Experts believe that achieving the $3,000 per ounce target is feasible, especially in the wake of potential political unrest post-elections. Gold remains an attractive investment option for many due to its historical role as a safe haven during times of volatility and uncertainty.
As gold continues its upward trajectory, investors and market participants are closely monitoring developments in the global economy, central bank policies, and geopolitical events that could further propel the precious metal to new record highs.