Seven Wall Street giants including JPMorgan Chase and Bank of America believe one asset is primed to rally in the year ahead.
The big banks collectively see gold moving to new all-time highs through 2025 amid expectations of more interest rate cuts from the Federal Reserve and more central bank accumulation around the globe, reports Reuters.
The firms also say rallies for the precious metal will be buoyed by retail investors piling into gold exchange-traded funds (ETFs).
Say JPMorgan analysts in an investor note,
“Strong physical demand from China and central banks supported gold prices over the past two years, but investor flow, and retail-focused ETF builds in particular, continue to hold the key to a further sustained rally over the upcoming Fed cutting cycle.”
Meanwhile, investment banking giant Goldman Sachs expects more investors will turn to gold in the coming months to shield their capital against potential macroeconomic headwinds.
Goldman analysts say an increase in investors getting gold exposure through ETFs along with the Fed’s rate-cutting cycle could account for 33% of the precious metal’s expected price jump. The remaining 67% of the projected price rally could come from central banks continuing to buy the precious metal.
“We reiterate our long gold recommendation due to the gradual boost from lower global interest rates, structurally higher central bank demand and gold’s hedging benefits against geopolitical, financial and recessionary risks.”
Goldman expects gold to climb to $2,900 early next year with a price target of $2,973 by the end of 2025.
Other Wall Street giants say it is within the realm of possibility for gold to surge to as high as $3,000 next year.
JPMorgan analysts believe gold may rally to as high as $2,850 by the end of next year.
In a base-case scenario, Citi says gold may end 2025 within the $2,800 to $3,000 price range.
BofA says it is possible for gold to reach $3,000 next year. Macquarie says gold could hit $2,600 in the first quarter of next year and possibly rally to $3,000 later in 2025.
However, others are not as optimistic about gold’s 2025 potential.
UBS expects gold to hit a 2025 top at $2,700.
At time of writing, gold is trading for $2,666.50 per ounce.
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