Gold Prices Expected to Reach $2,500 per Troy Ounce This Year – UBS Investment Bank
KUALA LUMPUR: Gold prices are expected to reach up to $2,500 per troy ounce (USD 1 = RM 4.71) this year, driven partly by strong demand from China, geopolitical uncertainties, and expectations of interest rate cuts by the US Federal Reserve (Fed).
Joni Teves, a precious metals strategist at UBS Investment Bank, stated that relatively strong physical demand from China earlier this year has been a key factor bolstering the market’s fundamentals.
“A combination of factors is supporting higher gold prices. We think gold will continue to hit new highs in the coming quarters. Given that gold reached $2,450 per troy ounce this week, it could potentially reach $2,500 per troy ounce, and we believe that with our baseline expectations, the risks are increasingly tilted to the upside,” she said.
Teves made these remarks during a virtual media briefing on the “UBS Asian Investment Conference Media Briefing Series: Oil and Gold—WWill prices remain elevated?” yesterday.
According to the London Bullion Market Association, on May 23, the price of physical gold stood at $2,357.35 per troy ounce.
Meanwhile, Teves noted that UBS House expects the Fed to start lowering rates in September.
“For this year and into 2025, we foresee two rate cuts (which I believe will occur in most meetings next year, except for the November meeting). In terms of gold prices in the near term, I see a clear dynamic of strong buyer interest, and therefore, the market will be well-supported in the long run. Consequently, I expect the trend of gold hitting higher highs and higher lows to continue,” she said.
