With international gold prices recently hitting record highs, analysts are increasingly confident that gold has entered a “new bull market,” with many raising their price forecasts. They expect that by the first half of next year, gold could surpass the $3,000 per ounce mark.
Paul Wong, a market strategist at Sprott Asset Management, noted that “gold has entered a new bull market,” driven by factors such as central bank buying, increasing U.S. debt, and the possibility of the dollar peaking. He explained that as the U.S. debt-to-GDP ratio rises, concerns about the sustainability of this debt, potential dollar devaluation, and the challenges of debt financing have historically pushed gold prices higher. Additionally, persistent inflationary pressures and a struggling global economy suggest that central banks and investors are more likely to increase their investments in gold.
On October 22, the spot price of gold in New York saw a slight increase of 0.6%, reaching $2,735.28 per ounce, close to the new high of $2,740.59 set on the previous day.
As a result of this bullish outlook, more analysts are raising their price forecasts for gold. Citigroup has increased its gold price prediction for the next three months to $2,800 per ounce, up from a previous estimate of $2,700, and believes gold could rise to $3,000 over the next six to twelve months.
Michael Widmer, a commodity strategist at Bank of America, shares a positive outlook for gold, forecasting it will reach $3,000 per ounce by the first half of next year.
Widmer pointed out that regardless of who wins the upcoming U.S. presidential election, they will face unprecedented fiscal challenges. Both Democratic candidate Kamala Harris and Republican candidate Donald Trump have policies that could exacerbate debt levels, potentially “slowing economic growth, increasing interest rates and expenditures, weakening national security, and limiting policy options—the risk of a fiscal crisis could escalate.” He noted that advanced economies are also expected to expand their fiscal policies, enhancing gold’s global appeal.
Vivek Dhar, head of mining and energy commodity research at Commonwealth Bank of Australia, anticipates that gold prices will reach $2,800 per ounce in the next three months, with an average of $2,800 for the quarter. He attributed this to a “persistently weak dollar,” predicting that gold’s average price in the fourth quarter of next year could reach $3,000 per ounce.
