Gold prices may reach $3,000 by 2025, says Bank of America, as the bullion extends its record rally on the back of speculative buying and sustained geopolitical tension in the Middle East and strong US job growth in March.
The gold prices held steady on April 10 after nearing a record peak in the previous session, as emerging inflationary risks and ongoing geopolitical tension underpinned the precious metal.
The recent gains have been fuelled by expectations for the US Federal Reserve to lower interest rates this year. David Rosenberg said gold prices may hit $3,000 if the US Fed lowers the key policy rates.
Markets also await the minutes of the Federal Reserve's March meeting. The Fed had held interest rates steady at 5.25-5.50 percent range last month, and indicated that they still expect to cut them by 75 basis points by end-2024.
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Bullion is considered a hedge against inflation and geopolitical uncertainties, but higher interest rates tend to dull the appeal of holding the non-yielding asset.
The momentum is a signal to increase holdings in gold, according to Rajeev De Mello, global macro portfolio manager at GAMA Asset Management SA. "It’s a relatively small market and it can squeeze higher very fast,” he said, comparing it to the size of US government debt securities. “It’s a momentum-driven asset, really."
On April 10, spot gold was little changed at $2,351.94 per ounce, as of 0339 GMT, after hitting a record high of $2,365.09 a day before. US gold futures gained 0.3 percent to $2,369.90.
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With agency inputs
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