Analysts at Goldman Sachs say the precious metal's price is on track to reach $2,300 an ounce by the end of the year, with gold's roughly 8% month-to-date rise leaving room for growth.
Futures prices rose on Monday, reaching $2,182 an ounce. Precious metals are considered a safe haven during times of geopolitical tension or low interest rates. Last week, the US Federal Reserve continued to signal that it would cut interest rates three times this year.
A team of analysts led by Samantha Dart said the Fed meeting “reinforced market (and our) expectations that three rate cuts this year are likely, with gold testing March's all-time highs and This is a new form of support that has the potential to exceed
Goldman Sachs analysts have raised their average gold price forecast for 2024 to $2,180 an ounce from $2,090, with a target of rising to $2,300 by year-end.
Barring any geopolitical surprises, analysts expect gold prices to trend further downward in the short term. But Dart said, citing Chinese imports of precious metals, “any real retracement decline is also likely to be limited by the resilience of physical purchasing channels.”
“Nevertheless, we remain constructive on gold over the medium term, backed by the Fed's eventual easing, which will see near-dormant ETF buying become decisive. It should be reopened,” Dart wrote.
The rise in bullion prices is unrelated to the recent outflows seen in gold-related ETFs. Strategists believe investors are directing their money to Bitcoin ETFs as they rallied to new highs earlier this month.
Central banks have been buying gold at historic levels over the past few years, helping to boost demand.
Adjusted for inflation, gold reached its all-time high in 1980 at $850 an ounce, the equivalent of nearly $3,200 in today's dollars.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X @ines_ferre.
