Bloomberg reported on Thursday (December 5th) that according to renowned investment bank Macquarie Group Ltd., with the Federal Reserve cutting interest rates and central banks increasing gold reserves, there is further room for gold prices to rise next year, possibly reaching record highs.

(Screenshot source: Bloomberg)

Macquarie stated that if US fiscal concerns intensify, gold prices may soar towards $3000 per ounce.

The Macquarie analyst team, including Marcus Garvey, stated in a report raising their gold price forecast that gold may face difficulties in the first quarter of 2025 due to the strengthening of the US dollar, but gold prices will continue to rise thereafter.

Analysts at the bank say that if Chinese demand rebounds or if the policies of US President elect Donald Trump could worsen the US fiscal outlook, gold prices could "quickly challenge" the $3000/ounce mark.

(Screenshot source: Bloomberg)

Gold is one of the strongest performing commodities this year, with a rise of 28% and setting a series of record highs.

The factors supporting the rise in gold prices include central bank buying, the Federal Reserve's shift towards interest rate cuts, and the rebound in holdings of gold backed exchange traded funds (ETFs).

Investment banks including Goldman Sachs Group Inc. and UBS Group AG believe that gold prices will further rise next year.

Macquarie analysts stated in their report that gold ETF holdings are still "25% below their 2020 highs, indicating that there is still significant buying potential if conditions permit.

The report states, "In this situation, we believe that lowering interest rates is key because it will reduce the attractiveness of money market funds and other savings products

Macquarie pointed out that the average price of gold is expected to reach $2650 per ounce in the first quarter of 2025, an increase of 1.9% from the previous forecast.

According to Macquarie, from April to June, the average price of gold will reach $2800 per ounce, a 12% increase from previous forecasts, after which gold may lose some appeal.