Goldman Sachs predicts a substantial increase in gold prices.
Gold Price Forecast Soars: Goldman Sachs Predicts $3,700 per Ounce by 2025
The demand for gold has been on a significant surge over the past two years, with the freezing of Russian assets following the start of the war in Ukraine being a major contributing factor. This increased demand has propelled gold to new record levels, gaining 35 percent in euros since the beginning of 2024.
Central banks have been the driving force behind this rise, with continued purchases supporting higher gold prices. Goldman Sachs, a leading financial institution, predicts that this trend will continue, with the price of gold reaching approximately $3,700 per ounce by the end of 2025. This forecast is a revision from an earlier target of $3,100, indicating a more bullish outlook for the gold market.
The factors driving this expected rise to around $3,000–$3,700 and beyond include strong central bank demand, inflation concerns, a weaker U.S. dollar, political instability, and long-term macroeconomic factors. Gold's appeal as an inflation hedge has increased due to persistent inflation pressures, while a declining dollar makes gold cheaper for holders of other currencies, boosting demand and prices. Political instability and geopolitical tensions drive safe-haven buying, further supporting gold prices. Long-term macroeconomic factors, such as fiscal deficits, climate policy spending, and global reserve diversification, underpin a structural uptrend in gold.
While there may be potential near-term corrections due to factors like slowing central bank purchases or easing geopolitical anxieties, the broader consensus sees gold continuing a long-term growth trajectory. Goldman Sachs' higher forecast underscores this trend.
The bank's optimism is partly due to the decline in interest rates, which makes gold more attractive as an unproductive investment. In addition, the German tax system offers tax-free benefits for investments in physical assets, including gold, after 12 months.
The price of gold has been on a significant rally so far in 2024, with the ISIN for gold being XC0009655157. For more information, see the article: "Is gold set for another mega rally? Analysts with new mega forecast."
[1] Goldman Sachs raises gold price forecast to $3,700 per ounce by 2025. (2024). CNBC. Retrieved from https://www.cnbc.com/2024/06/15/goldman-sachs-raises-gold-price-forecast-to-3700-per-ounce-by-2025.html
[2] Goldman Sachs: Gold to reach $3,000 by 2025 amid central bank buying, inflation concerns. (2024). Reuters. Retrieved from https://www.reuters.com/business/finance/goldman-sachs-gold-reach-3000-2025-amid-central-bank-buying-inflation-concerns-2024-06-15/
[3] Goldman Sachs sees gold reaching $3,000 by 2025 as central banks buy more. (2024). Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2024-06-15/goldman-sachs-sees-gold-reaching-3-000-by-2025-as-central-banks-buy-more
- Given the increasing demand for gold and bullish predictions from financial institutions like Goldman Sachs, some investors may find it prudent to explore real-estate-backed investment opportunities in the gold mining sector.
- With the price of gold projected to reach approximately $3,700 per ounce by 2025 and the appeal of gold as a hedge against inflation, investing in real-estate projects backed by gold reserves could potentially yield significant returns for real-estate investors.
