USD $4,165.18
Goldman Analysts Forecast Rising Gold Prices Amid Mounting Demand for Safe-Haven Assets as Global Market Volatility Grows
Gold prices are expected to see a steady increase as global trade tensions and uncertainties surrounding the US dollar continue to push investors towards safe-haven assets. Analysts project that, despite recent drops, gold’s appeal as a store of value will keep demand strong and could drive prices to new highs in 2024.
A report from GF Securities underscores how recent “Trump deals” have shifted market expectations. Following Trump’s election victory, analysts predict a strong dollar, elevated gold prices, and potential declines in oil and equity markets due to heightened volatility. GF Securities noted that, given the political and economic outlook, the market could experience heightened trade turbulence and an increased focus on stable assets like gold.
Shen Jianguang, chief economist at JD.com, explained that in reaction to Trump’s election and his stance on “virtual assets” such as bitcoin and US bonds, both assets have seen sharp rises, reflecting an influx of demand. “For many regions, particularly those with tense geopolitical relations with the United States, the status of gold, serving as a reliable safe-haven… a store of value, is growing,” he said. Shen added that diminished trust in the US dollar as a stable reserve currency could contribute to a longer-term climb in gold prices, as more investors and governments look to diversify away from dollar-denominated assets.
The recent volatility hasn’t diminished gold’s potential. Last month, gold reached a high of US$2,769.25 per ounce, marking a 35 percent increase from the beginning of 2024, before dipping slightly. On Wednesday, spot gold prices declined by 3.1 percent, ending at US$2,659.24 per ounce, though analysts see this as a temporary setback amid an overall upward trend.
In a forecast released by UBS last week, analysts projected that gold prices could reach as high as US$2,900 per ounce by the end of the third quarter next year. UBS pointed out that Trump’s approach towards tariffs, increased government spending, and a generally low-interest rate environment will likely support this growth trajectory. Should the dollar continue to show weakness, particularly in light of the US Federal Reserve’s loose monetary policy, gold prices could rally further, UBS suggested.
Other major financial institutions are echoing this sentiment. Goldman Sachs Research recently released a report suggesting that gold could climb to US$3,000 per ounce by the end of 2024. Lina Thomas, an analyst at Goldman Sachs, noted that investor interest has risen as many seek alternatives amidst ongoing currency instability and fears of inflation. She explained that “the appeal of gold has historically been linked to its status as a ‘hard asset’ when other investment vehicles become uncertain.”
Demand for gold has surged, particularly in China, where investors are increasingly turning to the metal as a hedge against currency fluctuations. According to data from the China Gold Association, China’s gold consumption rose by 11 percent in the first three quarters of 2024. This includes an increase in gold jewellery demand by 27.53 percent year-on-year and a 27.14 percent rise in bars and coins, reflecting strong consumer interest.
For global investors, the combination of economic uncertainty, anticipated trade tensions, and expected policy shifts from the US government continues to reinforce gold’s reputation as a resilient investment. Analysts agree that if current trends hold, gold prices are set to approach new highs, making it a significant asset in portfolios focused on wealth preservation amid market volatility.
Read the full commentary on SCMP
