Gold Price Forecasts Rise, Steady at Historic Highs
Gold $Gold - main 2412(GCmain)$ prices are holding steady near historic highs, with new U.S. consumer data pointing to economic weakness, providing a reason for further rate cuts in the coming months.
The Chicago Mercantile Exchange’s FedWatch tool shows the probability of a 50-basis-point cut by the Fed at its November meeting has risen from about 40% to 57% following the recent policy meeting.
BMO Capital Markets’ commodity analysts have released a new outlook, predicting an average gold price of around $2,700 per ounce in Q4, up 15% from their previous forecast of $2,350.
Looking ahead to the next 12 months, they expect gold to average $2,663 per ounce in 2025, a 21% increase from their earlier estimate of $2,200. They’ve also raised their long-term forecast to $1,900 per ounce, up 15% from $1,650.
UBS has also revised its predictions, forecasting that gold prices will remain stable through mid-2025.
So far this year, gold prices have surged nearly 30%, gaining momentum after the Fed cut rates by 50 basis points last week. Strong central bank purchases and escalating geopolitical tensions are driving safe-haven demand for gold.
Central banks around the world continue to buy gold, with the World Gold Council reporting net purchases of 37 tons in July, a 206% increase month-on-month, marking the highest monthly gain since January. While prices may impact global central bank demand, the long-term trend for net purchases remains strong.
Meanwhile, silver $Silver - main 2412(SImain)$ has also benefited from rising gold prices, with its price increasing about 34% this year.
UBS precious metals strategist Joni Teves attributes the rise in silver prices to investors seeking buying opportunities. The bank has raised its gold price target to $2,700 per ounce by mid-2025.
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