Gold price forecast (XAU/USD) is anticipated to approach $2,500 per troy ounce by the end of this year. This revised forecast, reflecting a significant increase of $200, comes from Carsten Fritsch, a Commodity Analyst at Commerzbank.
Current Price Trends
The gold price forecast is currently around $2,500. For now, further increases are unlikely. This stability results from expectations of US Federal Reserve interest rate cuts, which have already driven the price up by over 20% since February. The market has priced in roughly 100 basis points of rate cuts, so we don’t foresee significant additional upward momentum.
Impact on Physical Demand
The elevated gold price might affect physical demand, as observed in the second quarter. It’s uncertain if central banks will continue their high gold purchases. Recently, there was a shift towards net purchases of gold ETFs during summer, signaling potential changes in market behavior.
Potential for Price Fluctuations
If tensions in the Middle East escalate, gold could experience a temporary price increase. As a safe-haven asset, gold often benefits from geopolitical uncertainties. Looking ahead to early 2025, we anticipate the gold price will rise further due to anticipated Fed rate cuts, persistent US inflation, and a weaker US dollar.
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