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Some Top Investment Banks Forecast Rising Gold in 2024 and Beyond

Isaac Nuriani    |
Feb 23, 2024
  • Leading investment banks forecast gold heading well into record territory.
  • Citi: De-dollarization could be key to $3,000 gold in 2025.
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Those familiar with the movement of precious metals prices likely are familiar with gold’s historical interest-rate sensitivity and how changes in rates can impact prices.

For example, gold often has shown something of a dislike for rising interest rates. The reasons aren’t terribly difficult to understand. As universally prized an asset as physical gold is, one of its shortcomings is that it doesn’t pay interest. 

This means that in a climate of rising interest rates, investors may be inclined to look past the metal to those instruments that actually bear interest. That’s one reason gold’s value can take a hit when rates climb.

Rising interest rates also mean a stronger dollar. When the dollar strengthens, gold – which is priced in dollars – becomes more expensive for buyers outside of the U.S. Additionally, rising rates and a stronger dollar suggest the currency is not subject to further debasement at that time, which is one of the hallmark reasons that investors turn to store-of-value assets such as gold in the first place.

Given all of this, you’d think gold would have taken a terrible price beating over the last two years. Since March 2022, the Federal Reserve has raised the benchmark federal funds rate 11 separate times for a total of 525 basis points, not only sending nominal rates soaring but goosing real rates (rates adjusted for inflation) higher, as well.[1]

But gold hasn’t suffered as you might imagine. As a matter of fact, not only has gold not been crushed, it has been so resilient that through calendar years 2022 and 2023, it’s outperformed popular assets and market indexes.[2]

According to analysts, the price support enjoyed by gold in the current rate climate is due in no small way to the record level of gold-buying taking place among the world’s central banks. Although central banks worldwide have been net buyers of gold every year since 2010, the last two years have seen gold demand surge to extraordinary levels.[3]

In 2022, central banks purchased 1,082 metric tons of gold, more than any other single year in history. Then, in 2023, they logged another banner year of activity, buying nearly as much gold as they did in 2022.[4]

Central banks have been voracious gold consumers for a variety of reasons, including: the metal’s potential to “shine” during crises; as a way (for some central banks) to lower U.S. dollar exposure (de-dollarize); and to shore up their own balance sheets.[5]

And this level of central-bank gold demand is expected to continue through at least the foreseeable future, as analysts at State Street Global Advisors recently suggested.

“The reasons driving central bank gold purchases — to diversify their reserves, improve their balance sheets, and gain liquidity from an asset without credit risk — likely won’t change given today’s increasing economic and geopolitical risks,” State Street said, adding:

“This should support the outlook for global gold demand beyond traditional consumer and investor demand sectors and provide further diversified support for gold’s long-term price outlook.”[6]

In the view of several of the world’s most prominent investment banks, the plans of central banks to continue “full speed ahead” in accumulating the metal could mean a foundation for even stronger gold prices should interest rates start coming down as predicted in the latter part of 2024.

UBS, J.P. Morgan and Citi are among the global banking powers that see a projected return to accommodative monetary policy catalyzing gold into record territory this year. Additionally, Morgan and Citi analysts see gold potentially extending well into record territory through 2025, suggesting the near-term-future landscape for gold cultivated by both a shift to higher structural demand (as illustrated by central-bank buying) and declining rates could remain ideal for some time.

We know how central banks feel about gold right now. Just what, exactly, are investment banks saying about it?

Let’s take a look.

UBS, J.P. Morgan: We’re Looking for Record Gold This Year and Next  

By itself, the prospect of falling interest rates tends to generate significantly greater enthusiasm for precious metals, without regard to any other gold-positive factors that might be in play. But in an environment in which gold prices already are being supported by drivers unrelated to favorable monetary policy – such as relentless central-bank demand – optimism over what may be in store for the metal can grow even more acute.

Some of the biggest names in the world of investment banking certainly seem to feel this way. For example, UBS precious metals strategist Joni Teves maintains a sharply bullish outlook on gold based in part on the idea that existing “foundational” support for the metal unrelated to monetary policy may provide a launch pad for prices should that policy turn favorable for metals.

“The overall ‘macro’ backdrop where there’s a lot of uncertainty also justifies having an allocation to gold in the portfolio as a diversifier and I think that’s been holding up gold prices,” Teves said recently.[7] Gold’s potential value as a portfolio diversifier is one of the principal reasons central banks have been buying so much of it, according to the World Gold Council’s 2023 Central Bank Gold Reserves Survey.[8]

From there, gold is poised to climb higher on the strength of favorable monetary policy later in 2024, according to Teves.

“We are expecting gold to be pushed higher by a Fed easing. Also this comes with a weaker dollar,” the strategist told CNBC at the beginning of the month.[9] UBS sees gold moving well into uncharted price territory later this year, crossing above $2,200 per ounce.[10]

Teves also sees this combined energy fueling gold into next year, saying, “We think strength will continue into 2025, as well.”[11]

J.P. Morgan is another major figure in the global investment banking community currently expressing confidence in gold’s outlook through at least 2025.

J.P. Morgan Strategist: Look for Gold “Breakout Rally” Later This Year

In a recent report, Gregory Shearer, Head of Base and Precious Metals Strategy at J.P. Morgan, suggested the significant core price support that central banks have provided to gold over the last couple of years will continue. 

Although J.P. Morgan Research doesn’t believe central bank net purchases this year will surpass 1000 metric tons as they did in 2022 and 2023, the 950 metric tons that Morgan does think central banks will reach would mark the third-highest annual demand total on record.[12]   

“There is still scope for boosted reserves at some central banks as institutions look to diversify reserve assets, so purchasing is likely to remain structurally elevated compared with the late 2010s,” Shearer said.[13]

Shearer and his colleagues believe that once projected rate cuts begin later this year, they could propel gold meaningfully higher.

“We think over this period, the Fed cutting cycle and falling U.S. real yields will once again become the mono-driver behind gold’s breakout rally later in 2024,” Shearer said.[14] 

The analyst also made clear he thinks the beneficial impact of falling rates that start dropping later this year could be proportionally greater than the negative impact made by rising rates so far.

“Gold’s inverse relationship to real yields has historically been weaker over Fed hiking cycles, before strengthening again as yields fall over a transition into a cutting cycle,” Shearer said.[15]

As for price targets, Morgan currently sees gold knocking on the door of $2,200 per ounce later in 2024 and reaching $2,300 per ounce in 2025.[16]

As confident as UBS and J.P. Morgan seem to be in gold’s prospects through 2025, analysts at another investment banking powerhouse see as a possibility gold rising sharply higher into next year, reaching a level few others seem to be pondering at the moment.

We’ll look into that next.

Citi: $3,000 Gold Is Possible

Could gold really make it to $3,000 per ounce next year?

Aakash Doshi – Citigroup’s North America head of commodities research – and his associates raised that possibility just a few days ago in a research note.

According to the analysts, the key to gold soaring that far into record territory is a further intensification of demand by central banks. I just mentioned the expectation of J.P. Morgan analysts that while central-bank gold demand still should post one of its most impressive years in history, they’re forecasting a drop-off from last year’s total by about 8%.

Doshi and his colleagues, however, instead of a decline see a chance for annual central-bank gold demand in 2024 to go much higher than it ever has before. They think it could reach a stunning total – and bring the price of the metal along for the ride, potentially pushing it to a surprisingly high level by 2025. 

“The most likely wildcard path to $3,000-per-ounce gold is a rapid acceleration of an existing but slow-moving trend: de-dollarization across emerging-markets central banks that, in turn, leads to a crisis of confidence in the U.S. dollar,” the Citi analysts wrote.[17]

The push to de-dollarize among many of the world’s emerging economies – including Russia and China – has contributed to the tremendous surge in central-bank gold demand in just the last few years.[18] 

In 2020, central banks purchased a net total 273 metric tons of gold.[19] The year after, they bought 463 metric tons – a 70% increase.[20] In 2022, they bought 1,082 metric tons…more than double the net amount acquired in 2021.[21]

Central banks didn’t improve on that total last year, instead falling short by about 44 metric tons.[22] But there’s little dispute that gold demand among central banks has been prone to dynamic increases in the last several years. And in an interview with CNBC following the release of the Citi note, Doshi said, “If that goes again [to] double very quickly to 2,000 tons, we think that would be actually very bullish for gold.”[23]

If gold demand among central banks doubles from present levels as monetary policy pivots away from restriction, saying the result would be “very bullish for gold” might end up as the understatement of the year for 2024.

Obviously, we can’t know now if gold actually might reach any of the price targets highlighted by these investment banks. But I would suggest that specific price targets aren’t nearly as important as the rationale that serves as their basis. 

Some investors who share the current metals perspective of analysts at UBS, J.P. Morgan and Citi have thought it appropriate to acquire gold themselves, sometimes through a gold IRA. But even those who aren’t so inclined still may find themselves intrigued by the dynamics converging on the metal currently. It will be interesting to watch just how gold’s price movement proceeds from here.





[1] FederalReserve.gov, “Open Market Operations” (accessed 2/22/24); Goehring & Rozencwajg, “Rising Rates and Robust Gold Demand?” (February 2, 2024, accessed 2/22/24).
[2] StockCharts.com (accessed 2/22/24); DQYDJ, “Calculators” (accessed 2/22/24).
[3] World Gold Council, “Gold Demand Trends Full Year 2023” (January 31, 2024, accessed 2/22/24).
[4] Ibid.
[5] World Gold Council, “2023 Central Bank Gold Reserves Survey” (May 30, 2023, accessed 2/22/24); Willem Middelkoop, OMFIF, “Central banks and the revival of gold” (December 11, 2023, accessed 2/22/24).
[6] State Street Global Advisors, “What’s Driving Central Banks to Record Gold Purchases — and Will It Last?” (October 4, 2023, accessed 2/22/24).
[7] Bloomberg.com, “UBS’ Teves on Precious Metals” (February 6, 2024, accessed 2/22/24).
[8] World Gold Council, “2023 Central Bank Gold Reserves Survey.”
[9] Lee Ying Shan, CNBC.com, “Gold prices to hit $2,200 and a ‘dramatic’ outperformance awaits silver in 2024, says UBS” (February 4, 2024, accessed 2/22/24).
[10] Ibid.
[11] CNBC.com, “Gold could hit $2,200 by the end of 2024: UBS” (December 5, 2023, accessed 2/22/24).
[12] J.P. Morgan, “Will gold prices hit another all-time high in 2024?” (January 17, 2024, accessed 2/22/24).
[13] Ibid.
[14] Ibid.
[15] Ibid.
[16] Ibid.
[17] Lee Ying Shan, CNBC.com, “Gold at $3,000 and oil at $100 by 2025? Citi analysts don’t rule it out” (February 19, 2024, accessed 2/22/24).
[18] Anil Varma, Business Insider, “Global central banks are hoarding gold like never before as they seek to reduce ‘overconcentration’ of dollar reserves” (October 10, 2023, accessed 2/22/24).
[19] World Gold Council, “Gold Demand Trends Full year and Q4 2020” (January 28, 2021, accessed 2/22/24).
[20] World Gold Council, “Gold Demand Trends Full Year 2021” (January 28, 2022, accessed 2/22/24).
[21] World Gold Council, “Gold Demand Trends Full Year 2023.”
[22] Ibid.
[23] Shan, CNBC.com, “Gold at $3,000.”

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