Gold is poised to set a central bank investment record next year, driven by anticipated US interest rate cuts, according to the Goldman Sachs Group. The firm has also listed gold as one of its top commodity trades for 2025, predicting further price growth under the new Trump administration.
The potential growth in the price of gold is mainly driven by increased demand from central banks, which have been actively buying the commodity.
At the moment, Goldman Sachs has reiterated that it expects the value of gold to hit $3,000 per ounce by December 2025.
Gold has hit successive price records in 2024
Analysts at the Goldman Sachs Group have observed that gold has hit continuous price records, especially in the second quarter of the year, when it repeatedly hit its all-time high price.
This trend is expected to continue this fall, but it must also be said that, after President Trump was elected, gold prices took a hit, and the US Dollar recouped some of its value.
Analysis from Goldman Sachs also shows that the price of gold may continue to rise after a renewal of trade escalations, potentially reviving speculative positioning in gold. This means that the tensions could potentially encourage investors to bet on whether or not gold prices will rise or fall, without them actually owning the commodity.
Gold is predicted by Goldman Sachs Research to break new record highs. Read more about how emerging market central banks have ramped up purchases of the precious metal. https://t.co/yiC3FiOMii pic.twitter.com/44OMvlI6E8
— Goldman Sachs (@GoldmanSachs) November 1, 2024
Goldman Sachs: Other commodities might see fluctuations in prices in 2025, too
Goldman Sachs Group’s analysis was not limited to the price of gold. The group’s analysts have also estimated that prices of crude oil will oscillate between $70 and $85 per barrel, but the price might well change with the Trump administration’s plan in the Middle East.
They have also determined that the incoming US administration poses a great risk for Iran’s oil supply, especially considering that Trump is likely to impose more severe sanctions on the country.
These sanctions are expected to be part of a pressure campaign to deter Iran from further escalating its conflict with Israel. Additionally, the measures could potentially disrupt Iran’s oil production and distribution.
Goldman Sachs analysis also looked at what we could expect for agricultural goods in 2025. The analysts looked at the potential effect higher tariffs imposed on China might have on these US products and concluded that higher tariffs on China could reduce demand for American exports.
This could conceivably have severe effects on the US market, as Goldman Sachs analysts suggest that, if there were a lack of foreign markets to export to, re-balancing the US market would become a challenging task. Achieving this might require a drop in the prices of certain agricultural products such as soybeans, corn, and meat.
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