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UAE: Gold may reach $3,000 in Q1 2025; why is it still high time to buy yellow metal?

Gold reached an all-time high of $2,670 per ounce last month due to Middle East tensions and expectations of further US interest rate cuts

Published: Tue 8 Oct 2024, 10:43 AM

Updated: Tue 8 Oct 2024, 7:21 PM

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Gold prices will continue their upward trend in the coming months, surpassing $2,700 per ounce this year and $3,000 level early next year, say analysts.

Geopolitical tension, interest rate cuts, demand from China, buying by the central banks and upcoming US elections will dictate the direction of the yellow metal in months ahead.

At 9.30am UAE time, gold was trading at $2,644.34 per ounce, up slightly. It reached an all-time high of $2,670 per ounce last month due to geopolitical tension in the Middle East and expectations around further interest rate cuts by the US Federal Reserve.

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“We are bullish on gold right now. Gold has become fashionable for different reasons. BRICS and third-world countries are moving towards de-dollarisation, avoiding the dollar reserves as central banks are moving to gold reserves. If you look at hedge funds, there is a big influx of capital flowing into gold. There are a lot of factors that we are bullish on gold,” said Filipe Leal Camejo, senior vice president of Noor Capital.

Filipe Leal Camejo

Filipe Leal Camejo

“Goldman Sachs had set the gold target at $2,700 and it recently increased to $2,900 and the next psychological number is $3,000. We have already seen support at $2,600 and we will see $2,700, $2,900 and $3,000 levels in the months ahead. I think yellow metal will touch $3,000 in the first quarter of 2025,” said Camejo.

Elie Nachawaty, senior business development manager at XS.com, said $2,700 is the first resistance. “I expect gold to touch $3,000 in the first quarter of next year. The main factors that will dictate the gold will be war in the Middle East and Ukraine-Russia, interest rate by the Federal Reserve and inflation in the US.

Elie Nachawaty

Elie Nachawaty

Hani Abuagla, senior market analyst for Mena at XTB, said the yellow metal has dipped slightly after reaching a record high.

“Current geopolitics in region and Europe, ETFs (exchange-traded funds) increasing the gold holding, central banks still aggressive buying gold should push the gold up. It needs a little bit of push and momentum to reach $2,740,” he said.

Hani Abuagla

Hani Abuagla

“We might see another jump in the gold, but it is not going to happen this year. We started the year with around $2,070 and now have a $600 gain. We usually don’t see this much jump in gold, which means we might not see $3,000 this year. I believe we are going to see $3,000 next year. Gold can pick up to $2,730-40 around US elections and interest rate cuts in November,” added Abuagla.

Wael Makarem, financial markets strategist lead at Exness, said the precious metal – which is up nearly 30 per cent this year – is expected to stay on the higher if geopolitical tension in the Middle East continues to prevail.

Wael Makarem

Wael Makarem

“If the US economy seems to be getting stronger, this would limit the upside to the gold. There could be pressure on gold if geopolitical issues de-escalate worldwide. But we could see gold testing $2,700 if the Israel-Iran war escalates. If Chinese stocks and properties do well, this means less appetite for gold among Chinese consumers and this will depress the gold prices,” added Makarem.

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