Gold To Hit $2,900 In 12 Months? What Analysts Predict Amid Economic Uncertainty

Gold prices retreated slightly on Monday, with spot prices falling 0.5% to $2,732.98 per ounce as a strengthening dollar and rising Treasury yields pressured the precious metal off its recent record high of $2,758.37.

Despite the modest pullback, UBS analyst Giovanni Staunovo projects further upside for gold, targeting $2,900 per ounce within the next 12 months. “Prospects of lower U.S. interest rates have room to support further investment demand and lift gold prices,” Staunovo said in a note to investors cited by Reuters.

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The metal’s trajectory remains closely tied to Federal Reserve policy, with markets currently pricing in a 96.3% probability of a 25-basis-point rate cut by November. The anticipated monetary easing could provide additional support for nonyielding gold assets.

Gold's remarkable performance in 2024 has already delivered roughly 33% returns since Jan. 1, when prices stood at $2,063.73 per ounce. The surge reflects persistent demand for safe-haven assets amid ongoing geopolitical tensions in the Middle East and Ukraine.

Several key economic indicators this week could influence gold’s near-term direction. 

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Markets await Wednesday’s ADP employment data, Thursday’s Personal Consumption Expenditures (PCE) figures and Friday’s payrolls report. The dollar index is currently tracking toward its strongest monthly performance since April 2022, making gold relatively more expensive for holders of other currencies.

Physical demand patterns show notable regional shifts. Reuters said that Chinese gold consumption dropped 11.2% year-over-year in the first three quarters of this year, with elevated prices dampening jewelry demand. “While physical demand in Asia, particularly in China, has been weak lately, I guess the focus when it comes to gold demand is shifting from East to West,” Staunovo said in the note.

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According to a CBS News report, domestic factors in the U.S. market paint a different picture, with retailers like Costco saying they have depleted inventories of physical gold products amid robust consumer interest.

The surge in retail demand coincides with broader market uncertainty ahead of the upcoming presidential election.

Silver declined 0.8% to $33.42 an ounce in other precious metals markets, while platinum edged down 0.3% to $1,019.30. Palladium saw a 0.6% decrease to $1,186.73, following a 10-month peak reached after reports that G7 nations might consider new restrictions on Russian metals exports, including palladium and titanium.

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