Gold Prices Soar to New Heights, Analysts Predict Further Gains
Gold prices continue to break records, reaching an all-time high of $2,531.60 per ounce on Tuesday, surpassing the previous record set just last week. The precious metal’s spot prices were hovering around $2,490 on Friday, indicating a significant surge in recent days. This upward trend is also reflected in gold mining stocks, with the VanEck Gold Miners ETF hitting its highest level since mid-April 2022.
Analysts are bullish on gold’s prospects, citing various factors contributing to its rise. UBS highlights geopolitical risks, including tensions in the Middle East and the ongoing Russia-Ukraine conflict, as key drivers supporting gold prices. The financial services firm suggests allocating portfolios to oil and gold as protection against these geopolitical tensions.
UBS predicts gold could reach $2,700 per ounce by mid-2025, a forecast echoed by David Neuhauser of Livermore Partners. Neuhauser goes further, suggesting gold could hit $3,000 within three years, citing factors such as a weaker US dollar, large government deficits, upcoming elections, stubborn inflation, and geopolitical fragmentation.
Market dynamics are also playing a crucial role in gold’s ascent. A weaker dollar typically drives up gold prices by increasing purchasing power. Gold is widely regarded as a hedge against inflation and market volatility, making it an attractive option for investors in uncertain times.
ANZ Research anticipates strong demand for gold, pointing to elevated imports in China and increased consumption in India due to improving rural incomes and import duty cuts. While central bank purchases have moderated, they are expected to reach 800 tons in 2024. Interestingly, unidentified gold buying is offsetting weakness in reported monthly purchases.
For investors looking to capitalize on the gold rush, Wolfe Research notes that the VanEck Gold Miners ETF isn’t yet overbought and highlights the potential for a catch-up trade. The firm suggests that gold mining stocks are poised for a breakout and recommends Royal Gold and Newmont Corporation as compelling investment options.
Neuhauser, on the other hand, recommends investing in select junior gold miners, including Amaroq Minerals, Hochshild Mining, Coeur Mining, and Canada-listed Wesdome.
As gold continues its upward trajectory, investors and analysts alike are closely watching market trends and geopolitical developments that could further impact the precious metal’s value.
