Gold price forecast are likely to hit $2,500 per ounce by the end of this year, says Commerzbank. This follows a recent record high and is supported by expected interest rate cuts from the Federal Reserve.
Federal Reserve’s Rate Cuts to Boost Gold Prices
Gold price forecast (XAU/USD) has recently reached its highest price ever. Commerzbank’s analyst, Carsten Fritsch, now expects gold to reach $2,500 per troy ounce by the end of 2024, up from an earlier forecast of $2,300. This change is due to anticipated interest rate cuts by the Federal Reserve.
US Inflation and Its Impact on Gold
In July, the US inflation rate fell below 3%. However, the core inflation rate, which excludes food and energy, stayed at 3.2%. This suggests the Fed might start cutting interest rates in September. Although a large 50 basis point cut is unlikely, the market expects around 100 basis points in total by year-end, which could push gold prices higher.
Commerzbank’s Gold Price Forecast
Commerzbank has raised its gold price forecast to $2,500 per troy ounce for the end of 2024. They expect three rate cuts by then, with more cuts possible in the first half of 2025. This update reflects a more positive outlook for gold prices.
Outlook for 2025 and Beyond
Looking ahead to 2025, gold prices might rise to $2,600 by mid-year. However, they could drop to around $2,550 by the end of 2025 due to rising inflation and possible future interest rate hikes. Despite short-term changes, gold is expected to stay strong.
Historical Context and Market Trends
Gold is commonly viewed as a secure investment in times of uncertainty. With expected rate cuts and inflation, more investors might turn to gold, keeping its price high. The Federal Reserve’s actions and economic conditions will continue to impact gold prices.
Key Factors Influencing Gold Prices
Gold prices are influenced by several factors, including changes in US interest rates, economic conditions, and investor sentiment. Keeping an eye on these factors will help in understanding future gold price trends.
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