Analysts See Price of Up to $3,700 Per Ounce as Realistic!
Concerns are growing that U.S. economic growth could weaken significantly – particularly due to the U.S. government’s trade policies – while inflation is rising. According to the World Gold Council (WGC), the industry representation of the gold industry, this has led investors to increasingly flee to the safe haven Gold.
According to the latest WGC data, ETFs (exchange-traded funds) backed by physical gold have already seen solid inflows since the beginning of the year, but these strengthened significantly in March across all major regions. As the experts reported, North American-listed funds accounted for 61% of total inflows, while 22% of global demand came from European markets and 16% from Asian markets.
The report further stated that European gold ETF demand had lagged behind that of other regions in recent months. However, this is now beginning to change. Accordingly, Europe recorded inflows of $4.6 billion in the first three months, representing the highest value since the first quarter of 2020, the WGC explained.
Overall, the report continued, 92 tons of gold worth $8.6 billion flowed into global ETFs last month. This brought ETF inflows for the first quarter to 226 tons of gold worth $21 billion. This is the second-highest quarterly value on a dollar basis after the second quarter of 2020, according to the WGC.
Analysts Expect Further Gold Price Increase
In addition to the rising investment demand for the yellow metal, analysts worldwide are particularly citing the persistently high purchases by the official sector to justify why they expect a further increase in the gold price. Central banks had recently repeatedly expanded their gold holdings despite rising prices, and there are no signs that this trend could change, according to numerous experts.
As a result, many banks are currently raising their gold price forecasts. For example, analysts at Goldman Sachs are raising their prediction once again and now expect the precious metal to reach $3,700 per ounce by the end of the year! The trading range is expected to be between $3,650 and $3,950 (!) per ounce. Goldman Sachs had previously set the target for the gold price at $3,300.
UBS also expects the gold price rally to continue and the price for an ounce of the yellow metal to stabilize at a higher level in the future. The Swiss bank forecasts an increase to $3,500 per ounce of gold by 2025. Deutsche Bank’s original target for this year is $3,139 per ounce – which has already been surpassed for now. The analysts expect an ounce of the yellow metal to cost $3,500 by 2026.
