Analysts: Record levels for gold may reach $ 3,000 per ounce

Economic analysts revealed expectations that the price of gold will rise to record levels that may reach $ 3,000 per ounce next year.

Gold prices have recorded new highs and analysts expect more records, with the US Federal Reserve meeting approaching.

Spot gold settled at a record high in the previous session at $ 2,508.14 per ounce, according to data from FactSet, while US gold futures jumped 0.16% to record a new record at $ 2,540.8 per ounce during the hours of Monday, extending gains from Friday.

For her part, Sabrin Chowdhury, head of commodity analysis at BMI, said, citing gold’s appeal as a safe haven asset: “2024 is the year in which gold should reach multiple highs.” “Gold thrives on the uncertainty that has peaked,” she said, referring to 2024 as an election year, Ukraine’s recent incursion into Russia and rising tensions in the Middle East. She pointed to an expected escalation between Israel and Iran after Iran vowed to retaliate following the assassination of Hamas political leader Ismail Haniyeh in Tehran earlier this month.

Israel has put its military on high alert, and the United States has sent an aircraft carrier strike group and a guided missile submarine to the region to bolster its ally’s defense, according to CNBC.

Another factor driving bullion prices is the increased chances of a Federal Reserve rate cut in September. The Fed’s July meeting boosted investor confidence that a rate cut next month is “on the cards.”

“Once the Fed starts cutting rates, perhaps as early as next month, gold could reach $2,700 an ounce,” the BMI analyst said. Other analysts share the bullish view. Low interest rates reduce the opportunity cost of buying gold, making it more attractive, relative to interest-bearing assets such as Treasuries, which compete with gold as a safe haven. Low interest rates also weigh on the dollar, making dollar-denominated bullion attractive to holders of other currencies.

Investor sentiment in gold appears set to pick up over the next three to six months, analysts at Citi said in a note on Monday.

The bank expects gold to hit $3,000 an ounce by mid-2025, with an average fourth-quarter price of $2,550 an ounce. Traders will also be watching the annual economic policy symposium in Jackson Hole this week, which could provide further clarity on the outlook for interest rates, with Federal Reserve Chairman Jerome Powell scheduled to speak at the meeting.