With the global major central banks easing monetary policy and intense competition in the US presidential election, the gold bulls are firmly bullish on the price of gold, which is expected to soar to a new record and is projected to reach the milestone of $3000 per ounce.

On Friday, spot gold once hit a historical high of $2572.81 per ounce, with strong potential for the strongest annual performance since 2020. Due to geopolitical and economic uncertainties as well as strong buying interest from central banks, safe-haven demand has driven gold prices up over 24% year-to-date.

Aakash Doshi, Citigroup's North America head of commodities research, said that driven by the US interest rate cuts, strong ETF demand, and off-exchange physical demand, gold prices could reach $3000 per ounce in mid-2025 and $2600 per ounce by the end of 2024.

Last week, the World Gold Council reported that global physical gold-backed ETFs saw inflows for the fourth consecutive month in August.

With the approaching of the next Federal Reserve interest rate meeting on September 18th, market attention is currently focused on the first interest rate cut in the US since 2020. Low interest rates are often favorable for gold as it is a non-yielding asset.

CME's FedWatch tool shows that investors currently expect a 59% probability of a 25 basis point rate cut by the US, and a 41% probability of a 50 basis point rate cut.

Peter A. Grant, Vice President and Senior Metals Strategist at Zaner Metals, said that if the upcoming data shows risks to economic growth and a weak job market, it would increase the possibility of a 50 basis point rate cut by the Federal Reserve in November or December. This would boost the upward momentum in gold prices and accelerate the time to reach $3000.

Currently, major central banks around the world are actively cutting interest rates, with the European Central Bank announcing a 25 basis point rate cut for the second time this year just last Thursday.

Joseph Cavatoni, market strategist for the World Gold Council, said: "We are also evaluating other factors that stimulate Western investor demand, including the upcoming U.S. election, which may increase uncertainty, and gold as a hedge against immediate event risk."

The upcoming U.S. presidential election on November 5th may push up the price of gold, as potential market volatility may prompt investors to turn to safe-haven gold.

Senior market strategist Daniel Pavilonis of RJO Futures stated that reaching the target of $3000 per ounce is possible, adding that this scenario may be driven by post-election political turbulence.

Investment banks and analysts are increasingly bullish on gold, with Wall Street giant Goldman Sachs showing the highest confidence in gold's recent rise, stating that gold remains their preferred tool for hedging geopolitical and financial risk.

Ole Hansen, Head of Commodities Strategy at Saxo Bank, said that geopolitical risks, fiscal concerns, and potential changes in monetary policy, especially after the US presidential election, together constitute the bullish reasons for gold as a hard asset.

Australia's Macquarie has raised its gold price forecast this week, now expecting the quarterly average peak price in the first quarter of next year to reach $2600 per ounce, with the potential to soar to $3000.

Macquarie analysts stated: "Despite the challenging fiscal prospects for developed markets, the structural outlook for gold remains positive, but it can be said that the gold price has already reflected many factors, and there may be cyclical headwinds later next year."

Editor/ping