Key information
- Goldman Sachs forecasts an increase in the price of gold to 2,610 euros per ounce in early 2025.
- Substantial purchases on the London over-the-counter market could account for two-thirds of the planned price increase.
- Investments in exchange-traded funds are expected to contribute the remaining third of the price appreciation.
Market Predictions
Financial institutions expect the remarkable rise in the price of gold to continue through 2025, fueled by increased investments in exchange-traded funds (ETFs) and expectations of further interest rate cuts by major central banks around the world, including the US Federal Reserve.
Goldman Sachs maintains a bullish outlook on gold, citing falling global interest rates, sustained demand from central banks and gold’s effectiveness as a hedge against geopolitical, financial and economic downturns. They forecast that substantial purchases of gold in the London over-the-counter market could account for around two-thirds of the expected increase in the price of gold, which is expected to reach 2,610 euros an ounce at the start of the year 2025. Conversely, the gradual increase in investment in exchange-traded funds following the Fed’s planned rate cuts is expected to contribute the remaining third of the price appreciation.
Market Trends
Gold’s performance this year has been impressive, with its non-remunerative nature leading to a gain of almost 519.30 euros per ounce, or more than 28 percent, putting it on track for its strongest ever annual rise since 2010. The precious metal recently reached an all-time high of 2,416.88 euros per ounce and has consistently set new records throughout the year.
JP Morgan analysts point out that while strong physical demand from China and central banks has supported gold prices over the past two years, investor flows and investments in ETFs focused on gold trading Retail are crucial for sustained price growth during the next Fed rate cut cycle. The Fed began its easing cycle on September 18 by cutting rates by half a percentage point and plans a further reduction of 50 basis points by the end of the year and another percentage point full next year.
Forecasts and outlook
Gold’s attractiveness as an investment in low interest rate environments and geopolitical instability reinforces the bullish outlook. The US presidential election on November 5 could also contribute to higher prices, as potential market volatility could prompt investors to turn to safe havens like gold.
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