Most Banks Expect Gold’s Bull Run to Persist into 2025
Gold Rally To Continue? – Major banks are optimistic about gold prices.
They expect the current bull run to extend into 2025. This expectation is fueled by a revival in large inflows to exchange-traded funds (ETFs) and anticipated interest rate cuts from central banks around the world, including the U.S. Federal Reserve.
Strong Demand Drives Prices
J.P. Morgan analysts noted that strong physical demand from China and central banks has supported gold prices over the past two years.
However, they emphasized that investor flow, particularly retail-focused ETF builds, will be crucial for sustaining the rally during the upcoming Fed cutting cycle.
Significant Price Increase
Gold has gained nearly $570 an ounce, or over 27%, so far this year. This puts it on track for its biggest annual rise since 2010, establishing it as one of the standout assets of 2024.
Earlier this week, gold hit a record high of $2,639.95/oz and has reached record highs multiple times this year.
Gold Rally To Continue? – Analysts See More Growth
Analysts at UBS believe there is still room for gold to rise over the next six to twelve months. They pointed out that despite its multiple highs this year and strong performance compared to major stock indices, key factors such as large inflows to ETFs could drive further growth. They noted that this inflow has been missing since April 2022.
Gold Rally To Continue? – Federal Reserve’s Easing Cycle
The Federal Reserve began its easing cycle last week with a 0.5% rate cut. They forecast another 50 basis points of cuts by the end of this year and a full percentage point of cuts next year. In a low interest rate environment, zero-yielding bullion often becomes a preferred investment, especially during times of geopolitical turmoil.
Upcoming U.S. Election
The upcoming U.S. presidential election on November 5 could also boost gold prices. Analysts suggest that potential market volatility may drive investors toward safe-haven gold. As uncertainty increases, gold could become an attractive option for those looking to protect their investments.
Gold Rally To Continue? – Major banks are optimistic about gold
In summary, major banks expect gold’s bull run to continue into 2025, supported by strong demand and expected interest rate cuts. With significant price gains this year and favorable market conditions, gold is positioned for further growth. Investors should keep a close eye on upcoming economic events and market trends as they navigate this dynamic landscape.
Source: Reuters
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