(Bloomberg) — Gold will soar to a record next year on the back of central bank buying and U.S. interest rate cuts, according to Goldman Sachs Group Inc., which pegged the metal among the top commodity deals for 2025 and said prices could rise during the Donald Trump era. Trump’s presidency.
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“Go for gold,” analysts including Daan Struyven said in a note, reiterating a target of $3,000 an ounce by December 2025. The structural driving force behind the forecast is higher demand from central banks, while a cyclical increase would come in money flows into the foreign exchange market. They exchanged funds as the Federal Reserve cut spending, they said.
Gold has staged a powerful rally this year – breaking back-to-back records – before retreating in the immediate aftermath of Trump’s White House victory, which boosted the dollar. The commodity’s rise is supported by increased purchases by the official sector and the Fed’s switch to a more accommodative policy. Goldman said a Trump administration could also help precious metals.
An unprecedented escalation in trade tensions could revive speculative positioning in gold, they said. Moreover, growing concerns about the sustainability of U.S. budgets could also boost prices, she added, noting that central banks — especially those holding large reserves of U.S. Treasury bonds — could choose to purchase more of the precious metal buy.
Spot gold was last at around $2,589 an ounce after peaking above $2,790 last month.
Other forecasts see Brent crude trading between $70 and $85 a barrel next year, although there is a near-term upside risk if the Trump administration curbs flows from Iran, they said. Base metals were favored over ferrous metals, and European gas faced near-term upside risks from weather, they said.
“The new US administration further increases risks to Iranian supplies,” the analysts said, citing the potential for potentially stricter enforcement of sanctions in a maximum pressure campaign. “A potential boost in US support for Israel could also increase the likelihood of disruptions to Iranian oil assets.”
(Adds commentary on oil supply risks in final paragraph)
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