As gold tops $3,000/oz again, investment banks and fin services raise price outlook

Goldman Sachs, BNP Paribas, Macquaire, ING, UBS, Citigroup and other such multinational investment banks and financial services companies have raised their price outlook for gold with the precious metal topped $3,000 an ounce during the weekend. 

After touching $3,000 briefly on Friday evening and dipping, the yellow metal hit the $3,000 mark again at 1640 hours IST (1110 hours GMT). Gold is the best-performing commodity this year, gaining over 14 per cent since January 1. Last year, too, it was one of the best performers, increasing by over 30 per cent. 

“It (gold) has hit a series of consecutive record highs along the way, driven by trade frictions, central bank buying, and inflows into exchange-trade fund (ETF) holdings,” said Ewa Manthey, commodities strategist at ING Think, the economic and financial analysis wing of Dutch multinational investment bank ING. 

Significant milestone

According to John Reade, Senior Market Strategist, Europe and Asia, World Gold Council, gold hitting $3,000 is a significant milestone and reinforces the asset’s haven role in times of uncertainty. “From $1,000 during the financial crisis to $2,000 amid the pandemic, gold has proven to perform well in risk-off environments as well as delivering returns in line with most other asset classes since 1971,” he said.

Since 2022, gold has broken its tight relationship with US interest rates and the dollar as central banks have doubled their gold purchases and investment demand from emerging markets has grown, said the WGC senior market strategist. 

“Central banks have been net buyers for the past 15 years, but purchases have surged in the past three years, with over 1,000 tonnes bought each year since 2022, reaching 1,045 tonnes in 2024. We believe geopolitical factors have driven this increase – including de-dollarisation, sanctions, and inflation concerns,” said Reade. 

As global fragmentation continues, central bank buying will remain a strong pillar of demand and shape the market’s long-term dynamics, he said. 

Long-term outlook

Australia’s Macquarie Bank has raised its gold price outlook, expecting the metal to peak at a quarterly average of $3,150 per ounce in the third quarter of 2025, with a single-point high of $3,500. This level would closely align with the inflation-adjusted record of $3,505 per ounce from January 1980, following the second oil shock.

Its strategists also increased their long-term real price outlook to $2,250 from $2,000, anticipating a prolonged period of elevated gold prices.

“We view gold’s price strength to date, and our expectation for it to continue, as primarily being driven by investors’, and official institutions’, greater willingness to pay for its lack of credit or counterparty risk,” they said.

Gold has already outpaced Macquarie’s expectations this year, reaching its second-quarter forecast in the first quarter.

ETFs surge

The bank attributed this to geopolitical uncertainty, driven by Trump’s swift tariff announcements that have fueled inflation expectations and pressured real interest rates lower, despite intermittent US dollar strength and shifting Fed policy expectations.

ING Think’s Manthey said, “We see uncertainty over trade and tariffs continuing to buoy gold prices – and if trade tensions intensify and we see more retaliatory measures, haven demand for gold will continue.”

Total known gold exchange-trade fund holdings have grown by around 3.5 million ounces so far this year to almost 86.4 million ounces.

In a note to clients on Wednesday, BNP senior commodity strategist David Wilson said the firm expects gold prices to ultimately reach $3,100 in the coming months. 

Other bullish views

BNP’s strategists have raised their 2025 forecast average by 8 per cent, with prices expected to push above $3,100 per ounce during the second quarter of 2025, noting tariff fears have “dramatically” tightened the physical gold market.

Goldman Sachs, in its bullish outlook, has raised gold’s price target to $ 3,100 for the second quarter of 2025. Similarly, Swiss multinational investment bank UBS has raised its forecast for gold to $2,900.00 per ounce. The Swiss banking giant points to ongoing macroeconomic uncertainties as creating a supportive environment for further gold appreciation.

Bank of America and Citigroup have also come out with a bullish outlook because of declining real yields and increased portfolio diversification among institutional investors seeking protection against market volatility.

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Published on March 17, 2025





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