Gold prices expected to surpass US$2,500 by end of 2024

Local gold traders are optimistic about the future of bullion prices, forecasting that they could surpass US$2,500 per ounce by the end of 2024. This significant price increase is expected to follow a potential interest rate cut by the US Federal Reserve in September.

Gold was trading at US$2,395 per ounce in Asian markets yesterday, spurred by the announcement that President Joe Biden has withdrawn from the US presidential race, endorsing Vice-President Kamala Harris as the new Democratic candidate. This news pushed the price above US$2,400 overnight, according to gold trader Hua Seng Heng.

The market experienced pressure from a stronger US dollar, with a slight downward trend anticipated in the short term.

Last week, gold prices reached a record high of US$2,483.60, as markets largely anticipated a 25-basis-point US rate cut by September, which would enhance gold’s appeal due to lower interest rates.

In domestic trading, gold priced at 41,050 baht per one-baht weight fell by 200 baht by midday. This came as the Thai baht slightly fluctuated from July 19’s close, standing around 36.3 baht to the dollar.

Despite the recent price drop, Jitti Tangsithpakdi, President of the Gold Traders Association, remains confident that the much-anticipated Fed rate cut in September will drive global gold prices beyond US$2,500 by year-end.

Gold price

“The price estimate is based on a forecast of a single Fed rate cut this year.

“We also have to monitor the US presidential election later in the year, which could lead to a change in economic policies and interest rates.”

The upcoming US presidential election might influence the Russia-Ukraine war situation, potentially affecting safe-haven assets such as gold, Jitti added.

Republican candidate Donald Trump has promised to reduce corporate taxes and interest rates, which could lead to a wider US federal budget deficit.

Many investors believe that the deficit will continue to deteriorate under a second Democratic administration as well, JP Morgan said.

“Structurally bullish drivers for gold, like growing concerns over complacency regarding the rise in fiscal debt, tariffs and trade retaliations as well as broad America First rhetoric, are likely to remain intact.”

JP Morgan Research recently upgraded its gold price targets for this year and 2025, maintaining a strong structural bull case for gold, reported Bangkok Post.

The leading investment bank predicts that gold prices will reach US$2,500 per ounce in the fourth quarter of 2024 and US$2,600 in 2025. This forecast assumes a Fed rate-cutting cycle starting in November, which would propel gold prices to new nominal highs.