30 september 2024 : Gold prices are expected to reach USD 2,750 per ounce by the end of 2024, up from the previous forecast of USD 2,600, according to a report from UBS. This upward adjustment is driven by gold’s 29% surge this year, supported by strong investment demand, a weakening US dollar, and rising geopolitical tensions.
UBS also predicts further gains, with gold potentially hitting USD 2,850 per ounce by mid-2025 and USD 2,900 by the third quarter of that year. The rally in gold prices has been fueled by declining US real interest rates, central bank purchases, and a seasonal boost in jewellery demand.
On September 24, gold reached a record high of USD 2,670 per ounce, spurred by concerns over global economic growth and uncertainty surrounding the upcoming US elections, which historically create market volatility.
While UBS acknowledges the possibility of short-term price consolidation following the rapid increase, they expect any pullbacks to be brief. Citing the World Gold Council, UBS highlighted that gold tends to rise by up to 10% within six months of the first Federal Reserve rate cut.
UBS believes the current elevated price level leaves room for further gains in the coming months, especially with growing demand for gold ETFs. Despite a slowdown in Chinese gold demand, UBS attributes this to the country’s import quota being exhausted rather than a drop in local investor interest. The bank continues to recommend a 5% allocation of gold within a diversified USD-denominated portfolio and sees gold miners as attractive, albeit more tactical, investment opportunities in the current market environment.
