To The Moon

The main events affecting international $Gold - main 2502(GCmain)$ $E-Micro Gold - Dec 2024(MGC2412)$ prices in 2024 included expectations of rate cuts by the Federal Reserve, which spurred continuous gold purchases by central banks globally; geopolitical tensions in Russia-Ukraine, the Middle East, Israel-Lebanon, and Israel-Gaza, which drove safe-haven gold prices higher; an unexpected 50BP rate cut by the Fed in September, which initiated a second round of gold price increases for 2024; and after the US elections, economic uncertainty decreased, causing gold prices to retreat.

1. The specific moves of gold in 2024 can be divided into the following stages:

1. Early January to February (Volatile Phase):

   In the early months of 2024, gold prices showed a volatile trend. During this period, stronger-than-expected US economic data put pressure on gold prices.

2. March (Initial Rise and Historical High Breakthrough):

   After a slight slowdown in US economic data at the end of February, gold prices began to rebound and broke through historical highs at the beginning of March.

3. April (Continuation of the Upward Trend):

   The dovish stance of the Fed at the March FOMC meeting further propelled the gold price upward trend, and factors such as the escalation of Iran-Israel geopolitical conflicts and capital inflows from Asia drove gold prices further up to around $2,400 per ounce.

4. May (Rise Followed by Decline): In early May, US PMI and non-farm data were below expectations, and CPI declined smoothly, easing market reflation anxiety. Coupled with the Fed's hawkishness being less than expected at the FOMC meeting, gold prices resumed the uptrend in mid-May. However, due to the short pullback period of gold prices, they fell back at the previous high.

5. Second Half of the Year (Another Surge): Entering the second half of the year, the market once again entered a surge mode, with London market gold prices successively breaking through the three major integer thresholds of $2,500 to $2,700 per ounce.

6. November to End of Year (High-Level Correction): Entering November, international gold prices saw another high-level correction, and by December 31, gold prices in New York and London basically returned to around $2,620 per ounce.

As of the last trading day of 2024, the gold futures price was reported at $2,641 per ounce.

2. For 2025, institutions believe the following factors will continue to influence gold prices:

1. Federal Reserve Rate Cuts: Goldman Sachs expects the Fed to continue rate cuts by 125 basis points, which will boost gold prices by 7% by the end of 2025.

2. Dollar's strength: Goldman Sachs believes that the dollar's strength will drive a global central bank gold buying craze, thus pushing up gold prices.

3. Global Central Banks Increase Gold Holdings: Heraeus predicts that global central banks will continue to increase their gold holdings, and ETFs and other investors will favor gold again.

4. Geopolitical Risks: Geopolitical risks still exist, and the demand for gold as a safe haven may increase.

5. Inflation Expectations: JPMorgan expects higher US inflation expectations to be a factor conducive to gold price increases, with the US government continuing to face a huge budget deficit, increasing US debt, and a sharp rise in interest expenditure.

6. Debt Levels: Citi believes that in the context of ongoing "de-dollarization", rising global debt levels and other long-term themes also constitute a structural benefit for commodities.

7. Worsening Employment: Citi believes that the continued deterioration of the U.S. job market, high-interest rates dragging down economic growth, and increased demand for ETFs support gold prices.

8. Revival of Demand in China and India: The consumption demand in major markets such as China and India is gradually recovering，plus new investments, which may support the rise in gold prices.

9. Risks from Trump Administration's Uncertain Policies: The Trump administration may implement an America-first economic policy, leading to stronger economic growth, higher inflation, higher interest rates, and a stronger dollar, which may limit investors' willingness to increase gold purchases in the short term. However, Goldman Sachs believes that gold plays a key role in hedging potential economic tail risks, especially around US policy uncertainty.

10. Global Economic Recession: Citi believes that a global economic recession is another trigger that may push gold prices to $3,000, although it is also considered a "low-probability" scenario. This would force the Fed to cut rates rapidly to support economic growth. Generally, gold is inversely related to interest rates, meaning that when interest rates fall, gold rises.

11. Opportunity Cost: As the opportunity cost of holding gold decreases, its attractiveness to investors will continue to exist, which may help gold prices grow.

3. Institutions have also given some specific price forecasts and investment advice, for reference only:

1. JPMorgan: JPMorgan expects the average gold price to be $2,600 per ounce by the end of 2025. JPMorgan believes Trump's policies may be generally beneficial to the US economy, but how they are implemented will be key. Broader economic concerns make gold attractive, but questions remain about the ultimate investment value of gold.

2. Trading Economics: Forecasts that the gold price may reach $2,711 per ounce at the beginning of 2025.

3. ING Group NV: Expects the average gold price to be $2,760 per ounce in 2025.

4. Citi: Citi is optimistic about the gold outlook, expecting a 3-month target of $2,800 per ounce, and a 12-month target of $3,000 per ounce.

5. ANZ Research: Forecasts that the average gold price in 2025 will be $2,805 per ounce.

6. UBS: Believes that the increase in gold prices may slow down, but still expects gold to outperform other commodities. UBS expects gold prices to approach $2,900 per ounce by the end of 2025.

7. Heraeus: Predicts that gold prices will continue to set new records in 2025, reaching $2,950 per ounce.

8. Bank of America: Forecasts that gold prices will reach $3,000 per ounce in 2025.

9. Goldman Sachs: Goldman Sachs expects gold prices to reach $3,000 per ounce by December 2025. They list going long on gold as a top trade and consider gold as the preferred asset to combat inflation and geopolitical risks.

10. HSBC: Forecasts that gold prices will range between $2,350 and $2,950 per ounce in 2025.

11. Commonwealth Bank: Forecasts an average gold price of $3,000 in 2025.

12. World Gold Council: Forecasts a gold price of $3,000 in 2025.

The above summary contains investment banks' expectations for the gold trend in 2025, influencing factors, and investment advice for reference by investors. Wishing you a pleasant investment year in 2025.

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