Gold prices to continue breaking records until mid-next year

By Nuzla Rizkiya 

Gold prices are expected to continue its record-breaking upward trajectory with forecasts projecting a new all-time high of US $ 2,750 per ounce by the end of 2024, according to a report by the Union Bank of Switzerland.  

The precious metal, which has been experiencing a significant rise since early 2023, recorded its all-time high of US $ 2,670 per ounce last week, prompting the bank to upgrade its estimates after prices surpassed its long held year-end projection of US $ 2,600  per ounce way ahead of schedule. 

“Gold has risen by 29 percent this year, consistently breaking records on the way up. We raise our gold forecasts to US $ 2,750/oz by end-2024 (from USD 2,600/oz), USD 2,850/oz by mid-2025 (from USD 2,700/oz), and USD 2,900/oz by end-3Q25 (from USD 2,750/oz).” the bank said in a statement. 

The consistent rise in gold prices is attributed to several factors, including the drop in 10-year US bond yields, a seasonal recovery in jewellery demand and ongoing central bank purchases.  

According to the World Gold Council, gold prices tend to increase by up to 10 percent in the six months after the US Federal Reserve begins lowering interest rates.  

Since gold prices have already reached higher-than-expected values even before the US Federal Reserve begins cutting rates, the bank stated that there is significant potential for further gains. 

“As the metal's starting point is higher than we expected it to be at the start of the Fed's easing cycle, we see increased scope for gains to the year-end target, particularly as the US election is fast approaching (meaning more uncertainty) and investor fund
 demand (ETF) is picking up momentum” USB report stated.  

Meanwhile, Swiss gold export data also signalled a lag in Chinese demand, meaning China is buying less gold.  

However, UBS clarified that this is likely because China has reached its allowed import limit and not due to a drop in interest from Chinese investors. Therefore, the overall export data suggests that global investors are increasingly turning to gold as a safe-haven  asset amid growing uncertainty in global markets. 

“As such, we see even higher prices (for gold) over the next 6-12 months, driven by greater investment demand. We continue to recommend gold's hedging qualities as being attractive for the long term from a portfolio perspective” the bank said.