Gold prices are projected to continue their upward trajectory in the coming months, with some experts predicting that the yellow metal could surpass the $3,000 mark by the first quarter of 2025. A confluence of factors—geopolitical tensions, interest rate cuts, rising demand from China, central bank purchases, and the upcoming U.S. elections—will play a crucial role in determining the price of gold in the months ahead.
As of 9:30 AM UAE time, the precious metal was trading at $2,644.34 per ounce, a slight increase from previous levels. Last month, gold reached a record high of $2,670 per ounce, driven largely by ongoing geopolitical conflicts in the Middle East and speculation about further interest rate reductions by the U.S. Federal Reserve.
Key Drivers Behind the Gold Surge
Geopolitical Tensions and Interest Rates
Analysts agree that ongoing global conflicts, particularly in the Middle East, are one of the main forces behind the rising gold prices. With the Ukraine-Russia war showing no signs of resolution and tensions in Israel and Iran escalating, investors are flocking to gold, often considered a safe-haven asset during times of uncertainty.
According to Filipe Leal Camejo, Senior Vice President at Noor Capital, “Gold has become fashionable for different reasons. BRICS and third-world countries are moving towards de-dollarisation, avoiding dollar reserves as central banks shift towards gold.” Camejo emphasized the influx of capital from hedge funds, which has significantly contributed to the upward momentum of gold prices.
Moreover, the possibility of further interest rate cuts by the Federal Reserve is expected to boost gold prices even further. Lower interest rates typically weaken the U.S. dollar, making gold a more attractive investment. Camejo predicts that the precious metal will soon surpass the $2,700 level and could even touch $3,000 in the first quarter of 2025. “We’ve already seen support at $2,600, and we expect to see $2,700, $2,900, and $3,000 in the months ahead,” he added.
De-dollarisation and Central Bank Purchases
Another significant factor driving gold’s upward trend is the shift towards de-dollarisation, especially among BRICS nations (Brazil, Russia, India, China, and South Africa) and other developing countries. These nations are increasingly reducing their reliance on U.S. dollar reserves and turning to gold to diversify their assets. This shift has contributed to the surge in central bank gold purchases, further tightening supply and driving up prices.
Camejo also highlighted the role of hedge funds in the gold market, noting the significant capital flowing into the asset class. “A lot of factors are making us bullish on gold right now,” he said.
Market Analysts Remain Bullish
Resistance Levels and Future Predictions
Elie Nachawaty, Senior Business Development Manager at XS.com, echoed Camejo’s optimistic outlook, predicting that gold will likely reach $3,000 by the first quarter of 2025. However, he cautioned that the metal must first break through the $2,700 resistance level before reaching new heights.
“The main factors dictating the price of gold in the near future will be geopolitical developments, especially the wars in the Middle East and Ukraine, as well as interest rate decisions by the Federal Reserve,” Nachawaty said. Inflation in the U.S. will also play a crucial role in determining whether the gold price can sustain its upward momentum.
Similarly, Hani Abuagla, Senior Market Analyst for MENA at XTB, emphasized the importance of geopolitical events in pushing gold prices higher. “We’ve seen a slight dip after gold reached its record high, but current geopolitics in the Middle East and Europe, along with increasing gold holdings by ETFs and aggressive central bank purchases, should push gold prices up further,” he explained.
Abuagla believes that while gold may not reach $3,000 this year, the precious metal is still on track to break new records by 2025. “We’ve seen an unprecedented $600 gain in gold prices this year, which is unusual. This suggests we may not see $3,000 this year, but I believe we’ll reach that milestone next year,” he said.
Impact of Global Economic Trends on Gold
U.S. Elections and Chinese Demand
The upcoming U.S. elections in November 2024 are also expected to have a significant impact on gold prices. According to Abuagla, political uncertainty surrounding the election could lead to a surge in gold prices, especially if interest rate cuts are announced in the lead-up to the event.
“Gold could rise to $2,740 around the time of the U.S. elections, especially if there are indications that the Federal Reserve will cut rates in November,” Abuagla added.
In addition to U.S. politics, demand from China will be a critical factor in determining the future price of gold. Wael Makarem, Financial Markets Strategist at Exness, noted that while geopolitical tensions are keeping gold prices high, a strong U.S. economy could limit the upside. “If the U.S. economy appears to be strengthening, this could put pressure on gold prices,” Makarem said.
However, he cautioned that an escalation of the Israel-Iran conflict could push gold prices even higher, potentially testing the $2,700 level. Additionally, if China’s stock and property markets perform well, this could reduce demand for gold among Chinese consumers, which would in turn depress prices. “If Chinese stocks and properties do well, we’ll see less appetite for gold from Chinese consumers,” Makarem added.
Is It Still a Good Time to Buy Gold?
With gold prices already nearing record highs, some investors may be wondering whether it is still a good time to buy the precious metal. According to experts, the answer is yes—at least for now.
While there may be some short-term volatility, the long-term outlook for gold remains positive. Geopolitical uncertainties, interest rate cuts, and strong demand from central banks and consumers in emerging markets all point to sustained growth in gold prices. Moreover, with the U.S. elections on the horizon and the possibility of further interest rate reductions, many analysts believe that gold has yet to reach its peak.
“Gold is up nearly 30 percent this year, and we expect it to stay high as long as geopolitical tensions persist,” Makarem said. “There may be some downward pressure if global conflicts de-escalate, but for now, gold remains a solid investment.”
Conclusion: A Bullish Outlook for Gold
In summary, gold prices are expected to continue their upward climb, with many analysts predicting that the yellow metal could reach $3,000 per ounce by early 2025. Ongoing geopolitical tensions, central bank purchases, and the prospect of interest rate cuts will be key drivers of gold’s price movement in the coming months. Investors looking to capitalize on these trends may find that now is still a good time to buy gold, despite its already high price.
However, as with any investment, potential buyers should be aware of the risks, particularly if global tensions ease or the U.S. economy strengthens, which could limit gold’s upside. Nonetheless, for those seeking a safe haven in uncertain times, gold remains a compelling option.
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