(Bloomberg) -- Gold rose by the most since August as Goldman Sachs Group Inc. reiterated a forecast for prices to reach $3,000 an ounce next year, with analysts advising investors to “go for gold.”
Bullion jumped as much as 2% in intraday trading, surpassing $2,600 an ounce, on Monday after taking a battering in the wake of Donald Trump’s US presidential election victory, which spurred a dollar rally that weighed on commodities.
The bank listed a wager on bullion among its top commodity picks for 2025, citing Federal Reserve rate cuts that reduce the opportunity costs of holding gold; tariffs that underline its role as an inflation hedge; and steady demand from central banks.
Bullion has declined about 6% from last month’s record while the dollar surged to a two-year high. Against that backdrop, hedge funds’ bullish wagers fell to the lowest in three months, Commodity Futures Trading Commission data show.
However, Goldman analysts said this selloff provides an “attractive entry point to buy gold.”
Speaking on Bloomberg Television, Bank of America commodity strategist Francisco Blanch said he also saw gold hitting $3,000 an ounce by next year, but he cautioned it may fall to $2,500 an ounce in the short run if US inflationary pressures threatened the Fed’s rate-cutting path.
“Gold was pricing in at a pretty steep rate cut,” Blanch said. “If that doesn’t happen, it will be choppy for a bit.”
For the time being, some Fed policymakers appear committed to easing. On Friday, the Fed Bank of Chicago’s Austan Goolsbee said as long as inflation continued down toward the bank’s 2% goal, rates would be “a lot” lower over 12 to 18 months.
Fed Bank of Boston President Susan Collins said a December reduction remained on the table.
Spot gold was up 1.8% to $2,608.84 an ounce at 6:17 p.m. in London, bringing this year’s gains to 26%. The Bloomberg Dollar Spot Index dipped 0.4%. Silver, platinum and palladium all advanced.
--With assistance from Mark Burton, Jake Lloyd-Smith and Elizabeth Elkin.
(Updates prices throughout; Earlier version corrected percentage in second graf.)
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