Major Banks Predict Continued Gold Price Rally into 2025

(Reuters) – Major banks expect gold to extend its record-breaking price rally into 2025 due to:

• Revival in large inflows to exchange-traded funds (ETFs)
• Anticipated interest rate cuts from central banks, including the U.S. Federal Reserve.

Analysts at J.P. Morgan reported that while strong physical demand from China and central banks supported gold prices over the last two years, investor flow—especially from retail-focused ETFs—will be key for a sustained rally during the Fed's easing cycle.

So far this year, non-yielding gold has gained nearly $570 an ounce, accounting for over 27%, and is on track for its largest annual increase since 2010. The precious metal reached a record high of $2,639.95/oz earlier and has hit records multiple times this year.

UBS analysts believe gold could keep rising in the next six to 12 months, emphasizing the importance of renewed large inflows to ETFs, which have not been seen since April 2022.

Last week, the Fed began a new easing cycle with a half-percentage-point cut and forecasts an additional 50 basis points cut by year-end, plus a full point next year.

Gold is favored during low-interest periods and geopolitical instability. Analysts suggest the upcoming U.S. presidential election on November 5 might further drive gold prices due to potential market volatility.

Brokerage Forecasts for Gold Prices

Here is a summary of the latest gold price forecasts for 2024 and 2025 (in $ per ounce):

End-of-period forecasts