Askume, Sep 13 – The gold market showed signs of a rally as major central banks eased monetary policy and the US presidential election tightened, pushing gold prices past the $3,000 an ounce mark.
Spot gold hit an all-time high of $2,572.81 per ounce on Friday and was on track for its strongest annual performance since 2020, rising more than 10% on safe-haven demand amid geopolitical and economic uncertainty and strong central bank buying.
Aakash Doshi, head of North American commodities at Citi Research, said U.S. interest rate cuts, strong demand for exchange-traded funds and over-the-counter physical demand could push gold prices to $3,000 an ounce by mid-2025 and $2,600 by the end of 2024. $.
Last week, the World Gold Council said that gold prices had fallen steadily in AugustFlows into global physically-backed gold exchange-traded funds have increased for the fourth month.
The next Federal Reserve meeting is scheduled for September 18 and the market is intrigued by the possibility of the first US interest rate cut since 2020. Low interest rates are good for gold, but gold pays no interest.
Investors currently expect a 55% chance of a 25 basis point rate cut and a 45% chance of a 50 basis point rate cut, according to the CME FedWatch tool.
Peter A. Grant, vice president and senior metals strategist at Jenner Metals, said if incoming data shows that economic growth is at risk and the labor market is soft, then a 50 basis point interest rate cut is likely in November or December. There will be a hike, which will provide a positive outlook for gold prices, touching $3,000 will create favorable conditions.
Major central banks have continued to cut interest rates , and on Thursday the European Central Bank cut interest rates for the second quarter of this year.
Joseph Cavatoni, market strategist at the World Gold Council, said: “We are also assessing other factors driving Western investor demand, including the upcoming US election, which could increase uncertainty and pose immediate risk to gold.
The upcoming presidential election on November 5 may lead to a rise in gold prices, as potential market volatility may attract investors towards safe-haven gold.
Daniel Pavilonis, senior market strategist at RJO Futures, said a $3,000 an ounce target is possible, adding that the scenario could be driven by post-election political turmoil.
Investment banks and analysts are bullish on gold, with Wall Street bank Goldman Sachs being the most confident in gold’s near-term prospects and still its first choice to counter geopolitical and financial risks.
Australia’s Macquarie raised its gold price forecast this week and now expects the average cyclical peak to be US$2,600 per ounce in the first quarter of next year, and may rise to US$3,000.
“While the backdrop of a challenging fiscal outlook for developed markets remains structurally positive for gold, much of this has already been priced in, with cyclical headwinds likely to emerge later next year,” Macquarie analysts said.
