HSBC Raises Gold Price Forecasts Amid Geopolitical Risks and Fiscal Imbalances
In a recent update, HSBC has lifted its average gold price forecasts, citing a mix of geopolitical tensions, expectations of continued monetary easing, and fiscal imbalances. The surge in gold prices to a record high in late September has prompted the bank to adjust its forecasts across various timeframes.
For 2024, HSBC now predicts an average gold price of $2,395 per ounce, up from $2,305 previously. The bank has also significantly raised its forecast for 2025 to $2,625 per ounce, from $2,105. Additionally, the 2026 forecast has been adjusted to $2,515 per ounce, and the long-term outlook now stands at $2,200 per ounce, up from $2,000.
HSBC’s bullish outlook is supported by ongoing geopolitical tensions, economic uncertainty, and growing fiscal deficits, all of which have increased demand for gold as a safe-haven asset. While central banks continue to be major buyers of gold, the bank notes that further rate cuts may have diminishing support as the monetary easing cycle progresses.
Despite the positive sentiment surrounding gold, HSBC highlights potential headwinds such as a stronger U.S. dollar and a leveling off of central bank demand unless there is a significant price correction. Looking ahead, the bank expects gold to trade within a range of $2,350 to $2,950 per ounce through 2025, with year-end targets of $2,725 for 2024 and $2,575 for 2025.
In conclusion, HSBC’s revised gold price forecasts reflect a complex interplay of geopolitical, economic, and monetary factors that are likely to impact the precious metal’s performance in the coming years. Investors should stay informed about these developments to make informed decisions about their financial portfolios.