Investing.com – Gold is having a calm start to the year so far, with the yellow metal showing low volatility around $2,660 per ounce, a good distance from October’s all-time high of $2,801.
Indeed, gold is suffering from the decline in expectations of a rate cut by the Fed. And this situation is starting to encourage analysts to review their copies regarding bullish 2025 forecasts for the precious metal.
This is notably the case of Ceuyx of Goldman Sachs (NYSE:), which declared in a note published this week that the bullish forecasts concerning seem to no longer be relevant this year, in a context of uncertainty regarding new rate cuts.
In this context, the investment bank lowered its end-of-year price target to $2,910 per ounce and extended its target of $3,000 per ounce from the end of the year to mid-2026 , citing a slower pace of rate cuts this year than previously expected.
Note that the price target for the end of 2025 still represents an upside potential of around 9.4% compared to the current price.
After a slight 25 basis point cut last month, Federal Reserve Chairman Jerome Powell and other members emphasized a slower pace of fiscal easing to prevent inflation doesn’t get out of control again.
The Fed’s hawkish trend means traders are now only expecting one or two additional rate cuts this year, down from three or four previously.
Goldman analysts, for their part, expect reductions of 75 basis points, whereas they previously expected 100 basis points.
Note in this regard that the ISM US services index and the JOLTS report on job offers published yesterday turned out to be more solid than expected, which further fueled these fears of slower than expected rate cuts.
GS analysts also highlighted the moderation of speculative demand after Donald Trump’s victory in the US elections. Gold is generally considered a safe haven and tends to rise in times of uncertainty.
Exchange-traded funds tracking gold also saw weaker-than-expected inflows last month as market uncertainty eased, providing a lower starting point for gold prices. gold in 2025, analysts said.
“Opposing forces – weaker speculative demand and structurally higher central bank buying – have effectively offset each other, keeping gold prices range-bound over the past few months “, wrote the analysts in their note.
They further said that large central bank purchases continue to be the main driver of their long-term bullish forecasts, with additional cyclical support coming from a gradual increase in ETF holdings as interest rates rise. are decreasing.
