Goldman Sachs Group Inc. has pointed out that gold prices would make a record next year due to the Federal Reserve buying and cutting interest rates. The bank also added that gold may receive an extra boost under Donald Trump’s administration.
Goldman analysts including Daan Struyven noted that before the end of 2025, gold should be the top trading priority at a target price of $3,000 per ounce. The major driver of the expectation is increasing demand from the Fed, while a cyclical lift would come from the flow of traded funds as the central bank slashes the rate down, according to Goldman’s analysts.
This year saw the gold price hitting a record high before fizzling out after Trump’s victory strengthened the dollar. The hike in the gold price was a result of official-sector increase in purchasing, and the Fed moving toward a more approachable policy. Goldman also added that the Trump administration could aid the precious metal trade as well.
The escalation of the trade war may revive gold’s position in a speculative market. Additionally, huge concern over the U.S. fiscal sustainability may help push the price up, especially since the Fed, which controls large amounts of the country’s treasury reserves may decide to buy more bullion.
The price of gold was last at around $2,584 per ounce after it dropped from last month’s peak of over $2,790
