Gold $Gold - main 2412(GCmain)$ prices soared last week, surpassing the $2700 mark and setting a historical high. Over the past two years, gold has climbed steadily, breaking record after record.
Analysts from Bank of America recently pointed out that, driven by multiple factors, they maintain a target price of $3000 per ounce for gold.
Gold futures closed above $2700, marking an impressive increase of over 30% this year. However, from a technical standpoint, gold has been overbought for an extended period, suggesting a potential for significant pullbacks.
After a brief expected correction, buyers quickly stepped back in. A drop in interest rates, central bank purchases, political uncertainty, and rising sovereign debt are all pushing gold toward the coveted $3000 mark, which could realistically be reached by Q1 2025.
Forecasts Ahead
Institutions like BNP Paribas anticipate that the average price of spot gold will reach $2700 per ounce in Q4 2024, rising to $2725 in Q1 2025, and hitting $2750 by Q2. They project that the average for 2025 will settle around $2800.
Bank of America, however, has an even more optimistic outlook, predicting that gold could hit the $3000 milestone in 2025. They emphasize that gold remains the ultimate safe-haven asset, driving traders, including central banks, to increase their holdings.
Investor Sentiment
Aside from debt concerns, the recent interest rate cuts have finally drawn Western investors back into the gold market. Gold has emerged as one of the top-performing commodities of 2024, with a rise of over 30% this year.
With the Federal Reserve beginning a new easing cycle, optimism around rate cuts has fueled recent price gains. As investors prepared for this shift, many re-entered the market after some time away. Interestingly, non-monetary market participants are increasing their positions in both physical and paper gold, showing a solid commitment without signs of overbuying.
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