Analysts at HSBC foresee geopolitical risks and the U.S. election potentially driving gold prices higher until 2025. However, they anticipate that the rally may slow down later next year due to increased supply and high prices dampening demand.
According to an HSBC report, gold is currently enjoying significant momentum, which could continue into next year. Analysts suggest that due to geopolitical risks and economic uncertainties sparking 'safe-haven' demand, gold prices might remain above $2,200 per ounce. The growing fiscal deficit and expectations for further monetary easing are also fueling speculative gold demand.
HSBC analysts predict a slowdown in the gold price surge after 2025, influenced by both physical and financial market factors. By the end of 2025, gold prices might moderately decline due to decreased demand for jewelry and coins, as well as an increase in global gold production, driven primarily by mining activities.
Furthermore, elevated gold prices are boosting the supply of scrap gold, creating potential resistance from weak jewelry and coin demand alongside rising mining and recycling levels. Analysts also caution that gold-backed ETFs may continue to liquidate holdings, and central bank demand for gold might slow down in the face of high prices.
