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Gold Prices Set to Surge? Wall Street Anticipates Up to $4000 Target!

Analysts Notebook wrote a column · Apr 15 05:22
As tensions in the Middle East escalate, major Wall Street institutions have revised their gold price targets upward. Goldman Sachs is bullish with a target of $2,700, while Bank of America's expectation stands at $3,000. UBS is projecting an even more ambitious figure, calling for a remarkable $4,000 per ounce—a potential doubling of current prices.
$Gold Futures(AUG4)(GCmain.US)$ have consistently been hitting new record highs this year, successively surpassing the $2400 mark. On April 12th, as the $CBOE Volatility S&P 500 Index(.VIX.US)$—which gauges short-term investor panic—hit its highest point of the year, the international gold price surged to $2448.8, approaching the critical threshold of $2500.
Gold Prices Set to Surge? Wall Street Anticipates Up to $4000 Target!
The record-breaking rally in gold prices can be attributed to a confluence of factors including market concerns over persistent inflation in the U.S., escalating geopolitical conflicts, the approaching U.S. elections raising worries about the country's fiscal situation, and a Fear Of Missing Out (FOMO) sentiment among investors.
Against this backdrop, major Wall Street banks have been raising their gold price forecasts.
Gold Prices Set to Surge? Wall Street Anticipates Up to $4000 Target!
$Goldman Sachs(GS.US)$ has stated that risk-averse sentiment will drive gold prices to soar, with the institution raising its year-end gold price forecast from $2,300 to $2,700 per ounce. Analysts at Goldman Sachs noted in their report that gold tends to outperform other assets during rate-cutting cycles. They pointed out that, although rate cuts have not yet arrived, gold is expected to continue its exceptional performance driven by central bank demand, concerns over the U.S. fiscal conditions, and geopolitical situations.
$UBS Group(UBS.US)$, considering the expected Federal Reserve rate cuts and increased gold demand from central banks globally, anticipates that the gold price may continue to rise. UBS analysts have highlighted retail buying as the next catalyst for the commodity. They have increased their gold price predictions for this year by $250 per ounce, adjusting their June forecast to $2,300 an ounce—a figure already surpassed—and setting their projections for the year-end and the end of March 2025 at $2,500 an ounce, up from an earlier target of $2,250 for the end of 2024. Furthermore, analysts believe that investors holding gold for a 2-3 year period could potentially see prices double, climbing to over $4,000.
$Citigroup(C.US)$ analysts have joined their peers at UBS in boosting their gold price targets late last week. They have increased their zero-to-three-month forecasts for gold by 9%, to $2,400/oz. Citi has noted that in recent years, central banks' gold purchases have "accelerated to record levels" as they seek to diversify reserves and reduce credit risk.
$Bank of America(BAC.US)$ has set a target price for gold to reach $3,000 per ounce by 2025, pointing out that the current macroeconomic factors are favorable for gold. They note that if the Fed cuts rates within the year as anticipated, gold purchasing is likely to expand, potentially pushing gold prices even higher.
Source: Citi, UBS, Bloomberg
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