Most Banks Expect Gold’s Bull Run to Carry into 2025
Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.
Gold is up by more than 31% in 2024 and has delivered more than an 82% gain over the past five years. Nonetheless, many big banks believe that gold is set to continue its rally in 2025 and beyond.
This development is good news for long-term gold investors. But to understand what’s motivating financial institutions to maintain this stance, let’s dive into what banks believe gold can do in following years.
What Goldman Sachs thinks about gold
Research from Goldman Sachs suggests that gold will climb higher as central banks in emerging markets continue to buy more gold. Goldman Sachs research analyst Lina Thomas mentioned lower interest rates as a catalyst for a 2025 gold rally.
Thomas predicts that gold will reach $3,000 per troy ounce by the end of 2025. That price target represents a 17% improvement from current levels. Goldman Sachs recently reiterated its price target for gold, leaving little doubt on the bank’s current position.
What Bank of America thinks about gold
Goldman Sachs isn’t the only big bank that believes gold will exceed $3,000 per troy ounce by the end of 2025. Bank of America commodity strategist Francisco Blanch also contends that the precious metal can reach that price point next year.
However, Blanch cautions that gold’s performance could start slow if the Federal Reserve’s interest rate cuts aren’t as dramatic as the market anticipates. He believes gold can drop to $2,500 per ounce at the beginning of the year as investors realize that a sharp rate cut isn’t coming. Then, as expectations become more reasonable, gold can rally up to $3,000 per troy ounce.
Blanch’s commentary suggests that a buy-the-dip strategy may unfold at the start of 2025. Investors can choose to wait for that dip or use a dollar-cost averaging method that allows them to consistently accumulate gold each month in increments. Dollar-cost averaging also serves as a valuable approach in case gold continues its strong rally to begin 2025.
What Citibank thinks about gold
Citibank has three-, six- and 12-month forecasts that should make gold investors feel good about holding their precious metals. Citi Research raised its three-month forecast from $2,700 to $2,800. The financial institution also has a forecast of $3,000 per troy ounce for the next six to 12 months.
That’s not the only precious metal Citibank recommends. The bank also raised its price target for silver from $38 to $40 over the next six to 12 months. Citibank also established a $1,100 per troy ounce price target for platinum for the same time frame.
What Wells Fargo thinks about gold
Wells Fargo doesn’t believe gold will reach $3,000 per troy ounce at the end of the year. However, the bank’s $2,900 price target still implies 13% upside from current levels.
While Wells Fargo’s price target isn’t as exciting as the other banks, it’s still higher than gold’s 10.2% annualized return over the past 20 years. It’s also higher than gold’s five-, 10- and 40-year returns. However, all of Wells Fargo’s price targets represent a dip from last year’s 33% return.
What high price targets mean for gold investors
These price targets from large financial institutions suggest that gold prices will rally by more than 10% in 2025. Buying at current prices can help you lock in solid gains if the price of gold moves as analysts anticipate.
Many investors look to analysts for advice, and some people make decisions based on what a few analysts say. Higher price targets are enough to start a new rally, and as gold gets closer to $3,000, analysts are likely to hike their price targets again. However, it is important to realize that price targets are merely estimates.
Nonetheless, elevated price targets combined with gold’s long-term returns and its intrinsic value suggest that gold investors can benefit from building their positions. Gold can fortify a diversified portfolio and serve as a hedge that helps weather inflation and global uncertainty. It can also get you closer to your long-term financial goals if it maintains double-digit, year-over-year returns for an extended period of time.
Can you trust the analysts?
Most big banks seem to agree that gold is destined to reach $3,000 by the end of 2025. While some institutions like Wells Fargo have price targets just below $3,000, many banks tend to raise their price targets as an asset gains more demand.
For instance, Citibank raised its three-month forecast for gold after the precious metal broke past $2,700. As gold gets closer to price targets, analysts tend to raise them.
Bank analysts do plenty of research leading up to their price targets. They analyze macroeconomics, historical performances, supply, demand and other factors that influence the price of gold. It’s their full-time job to conduct research and stay on top of assets.
Granted, not every analyst is correct, and it’s good to do your own research before making an investment decision. However, analysts offer a good starting point, and many of them seem to agree that gold is set to rally in 2025.
