Gold rates to reach new height by year-end?
Gold prices expected to rise to USD 2,750 per ounce by end of 2024, driven by strong investment demand and geopolitical concerns.
Gold prices are projected to reach USD 2,750 per ounce by the end of 2024, up from its earlier target of USD 2,600, according to a UBS report.
The upward revision comes in light of gold's impressive 29 per cent rise this year, fuelled by a combination of strong investment demand, a weakening US dollar, and growing geopolitical concerns.
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UBS also predicts gold will climb to USD 2,850 per ounce by mid-2025 and USD 2,900 by the third quarter of 2025, further underscoring its bullish outlook on the metal. The rally in gold prices has been supported by declining US real interest rates, central bank purchases, and a seasonal recovery in jewellery demand.
Gold hit an all-time high of USD 2,670 per ounce on September 24, driven by concerns over global economic growth and the approaching US elections, which have historically led to uncertainty in financial markets.
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UBS noted that while short-term price consolidation may occur due to the rapid rally, any pullbacks are likely to be brief. According to the World Gold Council, gold has historically rallied by as much as 10 per cent within six months following the first Federal Reserve rate cut.
UBS believes the metal's current elevated starting point provides increased scope for gains in the coming months, particularly as ETF demand accelerates.
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Despite signs of slowing Chinese demand for gold, UBS attributes this to an exhaustion of the country's import quota rather than a decline in underlying demand from local investors. The bank continues to recommend gold as a strategic hedge within a diversified USD-denominated portfolio, suggesting a 5 per cent allocation to the precious metal. UBS also highlighted gold miners as attractive investment opportunities, though it views them as more of a tactical play in the current market environment.