Goldman Sachs projects that gold prices could surge to record levels, driven by central bank purchases and potential U.S. interest rate cuts next year. The bank has listed gold as a top commodity trade for 2025, with a target price of $3,000 per ounce by December 2025. Key factors include increased central bank demand and capital flows into exchange-traded funds (ETFs) as the Federal Reserve eases monetary policy.
This year, gold prices have experienced strong gains, frequently hitting new record highs. However, after Donald Trump's presidential election victory and the subsequent strengthening of the dollar, prices saw a decline. The rise in official sector purchases and the Fed's shift to more accommodative policies have supported gold prices. Goldman Sachs also suggests that the Trump administration might further bolster gold prices.
If trade tensions escalate to unprecedented levels, it could reinvigorate speculative positions in gold. Additionally, heightened concerns about U.S. fiscal sustainability may prompt central banks, particularly those holding significant U.S. debt reserves, to purchase more gold.
In other commodities, Goldman Sachs anticipates Brent crude oil prices to range between $70 and $85 per barrel next year. However, if the Trump administration imposes restrictions on Iranian oil, there could be short-term upward pressure on oil prices. They also favor base metals over ferrous metals, with European natural gas facing short-term upward risks due to weather factors.
Gold is currently trading around $2,593 per ounce, having reached a high of over $2,790 per ounce last month.
